Will you buy me a house?
February 25, 2017 9:53 AM Subscribe
No, seriously, is there someone who will buy the house I'm living in and let me live there for a year?
I rent a house in a very desirable neighborhood. Houses do not last more than one day on the market. The owner of the house passed away and the family asked if I want to buy the house. They'd rather not go through the hassle of putting it on the market and want it to go to a nice family (like mine.) Unfortunately, it is no where near what I can afford (one of the reason's I'm renting) but I'd rather not move - at least right away. It seems like an investor might be interested. How might I approach this?
I rent a house in a very desirable neighborhood. Houses do not last more than one day on the market. The owner of the house passed away and the family asked if I want to buy the house. They'd rather not go through the hassle of putting it on the market and want it to go to a nice family (like mine.) Unfortunately, it is no where near what I can afford (one of the reason's I'm renting) but I'd rather not move - at least right away. It seems like an investor might be interested. How might I approach this?
So, they have given you a price? And you have discussed this with a broker or lender and you would not qualify for the mortgage?
I have seen in desirable markets the occasional "rent back for one year" but this becomes an investment property and the pool of buyers is much lower. Unfortunately, since you are not the note holder, I don't think you can be a party in this transaction. Finding an investment buyer who would agree to the seller's stipulation that a third party remain as a renter in their property seems unlikely.
It would also be a bad idea for the seller who wishes you to remain in the property to sell at an under market price to an investor. Better for you to get the good price and, if you find you really cannot afford it, sell it and move, pocketing the likely increase in value (depending on your market, yadda, yadda, yadda).
posted by amanda at 10:05 AM on February 25, 2017
I have seen in desirable markets the occasional "rent back for one year" but this becomes an investment property and the pool of buyers is much lower. Unfortunately, since you are not the note holder, I don't think you can be a party in this transaction. Finding an investment buyer who would agree to the seller's stipulation that a third party remain as a renter in their property seems unlikely.
It would also be a bad idea for the seller who wishes you to remain in the property to sell at an under market price to an investor. Better for you to get the good price and, if you find you really cannot afford it, sell it and move, pocketing the likely increase in value (depending on your market, yadda, yadda, yadda).
posted by amanda at 10:05 AM on February 25, 2017
Depends on how the seller defines the property. Is it a house for sale or a rental property for sale? There are definitely people who buy rental properties whereby an existing good tenant is a feature of the property, not a bug.
If they are offering to sell it to you at a below market price just to avoid hassles and get out, go to a mortgage broker. There are lenders that would consider the discount as a down payment. A lender wants to think that if they have to sell the house, they want to get enough to cover the mortgage. If the house is sold at a discount in a rising market, they should be able to cover. Ask, especially if you have a great track record of paying your rent on time.
posted by AugustWest at 10:13 AM on February 25, 2017 [1 favorite]
If they are offering to sell it to you at a below market price just to avoid hassles and get out, go to a mortgage broker. There are lenders that would consider the discount as a down payment. A lender wants to think that if they have to sell the house, they want to get enough to cover the mortgage. If the house is sold at a discount in a rising market, they should be able to cover. Ask, especially if you have a great track record of paying your rent on time.
posted by AugustWest at 10:13 AM on February 25, 2017 [1 favorite]
I have a feeling, though, in a hot market, the seller is going to get some pretty enticing bids that will cause them to throw their "renter stays for one year" stipulation out the window. You may also get a rent increase or get evicted in short order. Without knowing your market or the seller's commitment to having you remain in the home, I feel like what you're asking for is likely a long shot.
I say this only as a person who has spent 2+ years trying to buy a home in a hot market and considered all kinds of "clever" options and pretty much finding that cash wins and "clever" is for people of means and connections, not the rest of us.
posted by amanda at 10:41 AM on February 25, 2017 [4 favorites]
I say this only as a person who has spent 2+ years trying to buy a home in a hot market and considered all kinds of "clever" options and pretty much finding that cash wins and "clever" is for people of means and connections, not the rest of us.
posted by amanda at 10:41 AM on February 25, 2017 [4 favorites]
What would be in it for an investor unless you pay well above market rate rent? If the neighborhood is hot the buyer wouldn't have trouble finding a new tenant, likely at a higher rent. The sole value of your position here is being an existing good tenant. That's not a strong position, as most responses are suggesting, and you should be prepared to move unless you can scrape together the purchase.
posted by spitbull at 11:04 AM on February 25, 2017 [8 favorites]
posted by spitbull at 11:04 AM on February 25, 2017 [8 favorites]
Do you have a current lease agreement with your previous landlord? Does it have any terms in there that allows the landlord to break the lease for sale of the property?
Depending on the jurisdiction you're in, most of the time existing lease agreements must be honored by the purchaser of the home or at least some sort of agreement must be come to to allow you to cancel the contract. If you've got some time left on the lease you may have some rights to be able to stay at least until the end of that term.
posted by Karaage at 12:44 PM on February 25, 2017 [1 favorite]
Depending on the jurisdiction you're in, most of the time existing lease agreements must be honored by the purchaser of the home or at least some sort of agreement must be come to to allow you to cancel the contract. If you've got some time left on the lease you may have some rights to be able to stay at least until the end of that term.
posted by Karaage at 12:44 PM on February 25, 2017 [1 favorite]
You know that if you can pay rent on a house in a desirable neighborhood you're likely able to pay a mortgage, perhaps in a slightly less desirable neighborhood. Could you borrow the downpayment? Or is there a way you could share the house with another paying tenant if you could scrape the money together to buy it?
posted by spitbull at 4:23 AM on February 28, 2017
posted by spitbull at 4:23 AM on February 28, 2017
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posted by cacao at 10:04 AM on February 25, 2017