Jump to content

Please help me draft a letter
Selling house to tenant


  • Please log in to reply
17 replies to this topic

#1 PureBliss

Posted 26 December 2012 - 06:53 PM

Hi there, hoping for some help.

We are looking to sell our investment property and have had it valued by 2 agents.

Our tenant has advised both agents that he would be prepared to buy it and named a figure.

His figure is about $30k under what we would be expecting, even taking into account the fact that we could sell it directly to him, without agents fees.

So, we have decided as a first step, we would like to write him a letter, outlining our "minimum",  and give him an opportunity to raise his offer. We would sell to him privately and use a conveyancer to handle all of the logistics.

If he doesn't raise his offer we will put it on the market (with an agent) and see how we go.

Has anyone sold a property privately before? Any real estate gurus out there? What would be critical to include in the letter? Is there anything else I should be aware of?

Thanks in advance

#2 MrsFeral247

Posted 26 December 2012 - 07:03 PM

Have you had any prior contact with the tennant?  I would think that would play a part in how formal the letter needs to be.

I would make it brief and include your number for him to call to further discuss.

Dear Tennant
As you are aware, we have had the property you are residing in appraised with the intention to sell.  We have had feedback that you may be interested in the property and we would like to offer you the opportunity to purchase prior to putting it to the market. Please feel free to contact me on 0412 2345 6789 if you would like to discuss this further.

My sister purchased privately.  It was very straightforward as there was one less person in the loop.  My sister dealt with her conveyancer, the vendor dealt with theirs, and it all went off without a hitch.

Good luck!

#3 Feral-as-Meggs

Posted 26 December 2012 - 07:14 PM

Id put the price you want in there

I'd also put a timeframe on it so you don't get strung along and miss the ideal season to market the property (whenever that is for your property).  

You could say....

If you are interested in buying we would need to exchange contracts by ......... to give us time to put the property on the open market if necessary.

#4 TillyTake2

Posted 26 December 2012 - 08:19 PM

How realistic are you being? Keep in mind most agents will be "optimistic" about what the property is worth with the plan being to encourage you to decrease the price if it doesn't sell.

#5 BetteBoop

Posted 26 December 2012 - 08:26 PM

QUOTE (TillyTake2 @ 26/12/2012, 08:19 PM) <{POST_SNAPBACK}>
How realistic are you being? Keep in mind most agents will be "optimistic" about what the property is worth with the plan being to encourage you to decrease the price if it doesn't sell.


Agree with this. They know vendors are likely to list with whoever gives the highest estimate so they sometimes inflate valuations to secure a commission.

Look at sold properties in the same area and get a idea of what it's really worth. Keep in mind how much you're saving on real estate commissions and that even if you listed it, people would offer below what you probably expect.

It's always going to come down to negotiating a price. The purchaser has put in his offer, generally what happens next is you make a counter offer and be prepared to meet in the middle. Or, as PP said, give your non-negotiable price and give them a take it or leave it offer.

#6 JRA

Posted 26 December 2012 - 09:04 PM

QUOTE
His figure is about $30k under what we would be expecting, even taking into account the fact that we could sell it directly to him, without agents fees.


Check the agreement with your agent who manages the rental. They may have rights to the sale

#7 Pearson

Posted 26 December 2012 - 09:56 PM

per JRA - check with the agent who manages the property

research what properties have sold for in the area - and is your property of the same standard as these properties?

maybe this is a starting point for him.

I also, once you have checked with PM, write the letter MrsSmith suggests.

#8 Illiterati

Posted 26 December 2012 - 09:57 PM

You have a buyer. In a falling and vey uncertain market. I'd probably meet them half way on the offer and be done with it.  Especially if the house's value is on the higher side.

What if you went to auction and the house was passed in at your current price? What would you do? Take it off the market completely or would you be willing to sell at slightly below?  You might end up selling at their tenants current offer and then have to fork out for agent commission and advertising fees as well.





#9 greengoddess

Posted 27 December 2012 - 02:42 AM

I have both bought as a tenant and sold to a tenant.

I was renting a property when it came up for sale, and ended up buying it (it was my first property) - we dealt with an agent rather than the landlord. It was as per any purchase, really.

I also sold a property to a tenant. They had phoned me to say that they were interested. Their first price was about $60K less than I wanted. I told them the price I wanted to clear (which was reasonable in the context) and they said yes automatically.... mind you, they were older and the wife had just been diagnosed with something (not sure what) and I think they just wanted to stay put rather than go through the moving process again (they'd been tenants about 8 months or so). We did the deal on Christmas Day (a few years back) and had a quick settlement (using the same lawyer as it turned out! - don't worry, we both had to sign disclaimers).

I'd probably make any approach to them reasonably informal at this point. Depending on what you're expecting for the property, the fees might be $10K, $15K or more, so take that off your initial figure and you're getting close to half way to theirs. Then think about the cost of having it on the market - marketing costs upwards of $1000, more if you go to auction; each month it is on the market you will have rates (body corp if it's an apartment), mortgage interest.... so for three months on the market, you might have about $5-10K costs (depending on the property), which, when added to the agent's fee, means you're getting close to the figure your tenants suggested.

I guess what I am trying to say is look at what it will cost you to put the place on the market and take that off your initial price and then use that as a more realistic figure to begin bargaining with your tenants. Don't focus on the price you want to achieve, as that is not the money you will receive in hand, as such. It will be a lot easier to have a quick sale with the tenants, than to rely on disappointed tenants to keep the place in good order for inspections!

Good luck
GGxx




#10 red_squirrel

Posted 27 December 2012 - 12:45 PM

Have you had a bank value it?
The banks will only lend a certain amount of that value to the tenants.
Bank evaluations tend to be lower than real estate agents who want your business.
What I am trying to say is, as much as they want the property, the bank may not see the house as worth that much and subsequently not lend as much.

#11 PureBliss

Posted 28 December 2012 - 03:39 PM

Many thanks for your replies, they have given us confidence to give this a go privately! Here is the initial draft - any feedback welcome!!


Dear xxxx,

As you are aware, we have had the unit you are residing in appraised with the intention to sell. We have had feedback that you may be interested in the property. We apologise for taking several weeks to respond to your interest, sadly we had a death in the family just prior to Christmas.

We would like to offer you the opportunity to purchase the unit privately, prior to putting it to the market. We have considered your initial offer, the market value of the property, and the advantages that come with a quick, private sale. We wish to advise you that our preferred selling price is in the vicinity of $460,000.

Should you wish to amend your initial offer (which we understood to be $420,000) we can be contacted directly on xxxx or xxxxx).  We intend to use xxxx Conveyancing  Services to complete all necessary contracts.

We would like to exchange contracts by Fri 18th January 2013.  If we have not arranged a private selling agreement by then, we will put the unit on the market with a local agent.

Thank you for being a great tenant, and keeping the unit in good order during your time there.  We hope that we can come to an arrangement shortly that we are all happy with – and you can enjoy the unit on the beach this summer!
Kind regards


#12 skylark

Posted 28 December 2012 - 03:54 PM

What area are you in? Units here are regularly selling around 65k below the initial asking price (a drop of around 20%), so your agent valuations may be overly optimistic. Obviously depends on the area you are in and how the market is travelling there.

#13 PureBliss

Posted 28 December 2012 - 04:15 PM

Hi there, it is a beachside unit in SE Melbourne. Its an unusual one, because there isn't alot like it left in the area. Most unit blocks have been redeveloped and are now commanding $800k.

Its 3brm, metres from the beach, shops and station. Recently renovated.

The agents both said that conservatively we would get around $460k, maybe up to $480k in current market. Two years ago it would have got more like $500k. Sigh!

If the tenant offered $440-450k we would sell it for sure.

#14 Jellyblush

Posted 28 December 2012 - 08:23 PM

It sounds amazing, I'll buy it!

#15 ekbaby

Posted 28 December 2012 - 08:36 PM

I think your letter has a bit too many personal details in it, they don't need to know about what's been happening in your family, for example. I would probably drop the first and last paragraphs.

Are you able to speak to them by phone?

#16 humphreybear

Posted 29 December 2012 - 08:09 AM

I agree with ekbaby, it is too long and too personal (and after all whether they buy it or not, they are there this summer).

I think a phone call would be better.

#17 Shellby

Posted 29 December 2012 - 10:21 AM

I would just call them. We brought our current house through private sale - we just talked on the phone, I said I wanted this price, they said ummm we want this one, I came back with a little higher and why, they came back a little lower and why, then after 5 minutes we agreed on a price and it was done. No letters, no waiting - just yep I'm happy to pay that, your happy to get that - I will go and sign the papers tomorrow.

I also agree with looking into a non RE valuation. I know here most houses have been selling for $20,000+ less than what the RE have said or listed it at. Also banks don't go on RE valuation and you may find you miss out on a whole market as they can't borrow that much for that property from the bank as the bank values it lower than what you want, so the bank will only lend to a certain amount.


#18 Illiterati

Posted 29 December 2012 - 04:01 PM

Who has been relaying the information between you and the tenant? The letter sounds like it is a third party? Did they express their interest to buy and the offer price to the leasing agent and who then passed it to you?

Why don't you just negotiate over the phone? The only paperwork that matters is the contract and that is the only written thing I would be giving a buyer.




1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

Why Tracey Spicer has given up make-up

"After 30 years on television, I had become what I despised: a painted doll who spent an hour a day and close to $200 a week putting on a mask."

Empowering bikini photo of 46-year-old mum goes viral

When a group of teenagers made rude remarks about her body as she walked past them in a bikini at the local beach, Julie Cross refused to cover up.

Devastated widow discovers she's pregnant the day before husband's funeral

They had been trying to conceive a baby for seven years. Tragically Kristy Kirchner found out she was pregnant the day before her husband Royce's funeral.

Gabriella Goat sues Peppa Pig

Every toddler's favourite television pig is being sued by an Italian woman who shares a name with a Peppa Pig character.

Meet the Mpregs, the male pregnancy enthusiasts

"Men can't have babies - that's something only women can do! But our community is full of like-minded people who wish otherwise."

Your new motherhood survival kit

Forget about the bright, pretty baby things - while you're in survival mode, all you'll need are the essentials.

More than 100,000 cars recalled globally after death of pregnant woman

The announcement of a mass recall comes as Malaysian police investigate the death of pregnant woman in July.

Win a family pass to Disney Live!

We have 4 family passes to give away to see Disney Live! presents Three Classic Fairy Tales, touring Australia this December/January.

I had a 'good baby' but still suffered from postnatal depression

I had a much wanted precious baby girl, a 'good baby' who slept well, self settled and was mostly content. It just seemed implausible to think I could succumb to depression.

There's no need to eclipse a babymoon

As long as pregnant women do their research, travelling during pregnancy can be done safely.

Mum and daughter have babies on same day

"It's not really something you ever want or think could happen. To have my mum going through it with me is probably the most special, amazing thing ever.”

Our baby's reflux caused the longest endurance test of our lives

I'm glad she wasn't my first child, or I would have thought that this was normal.

Win one of 5 Little Tikes Cozy Coupe Sport

Australia?s No 1 selling car is now available in a Sports model and we have 5 to give away to some lucky Essential Baby families.

The podcast that reminds mums they are not alone

A mum's complicated, gruelling labour gave birth to two lovely beings: her daughter and her delightful podcast, The Longest Shortest Time.

Is it too late to change my midwife?

My wife is nine months pregnant and we are planning a home birth - but we've had late problems with our midwife team.

The Very Hungover Caterpillar: a parody many can relate to

A new book released this month will be sure to have parents nodding and giggling in recognition the world over.

Babywearers unite against misinformation

Everyone has heard of people power, but what about passionate babywearing power?

Reliving the birth experience

When people ask about how my labour went, I usually respond: "Good, I think? Four hours long, and yeah it hurt, but I dunno, it's labour, it's giving birth, it's painful... but I guess it was good? As good as good gets?"

Literary baby name inspiration

From Harry Potter to Shakespeare and everything in between, we've scoured the library shelves for literary baby name inspiration.

Preparing your child to attend a sibling's birth

Thinking about having your kids at the birth of your baby? Here are some things to consider.

Counselling helps mum deal with triplets' early birth

When Kimberlee King's waters broke nine weeks before her triplets were due, she went into autopilot as she packed her hospital bag.

The women balancing babies with new businesses

Motherhood teaches us that we can be more tolerant, patient, and loving than we ever thought possible - and can also show us that we're innovative, creative and entrepreneurial, too.

It's true, kids grow up overnight

A dad ponders how his toddler daughter can change so much in just one 24 hour period.

Father sings to dying son days after losing wife

A heartbreaking video shows a new dad singing 'Blackbird' to his dying son just days after losing his wife.

Download now: Essential Kids Activity Finder app

Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Win one of 5 Little Tikes Cozy Coupe Sport

Australia?s No 1 selling car is now available in a Sports model and we have 5 to give away to some lucky Essential Baby families.

Join PADDINGTON on the red carpet!

To celebrate the release of PADDINGTON, we are giving five lucky winners the chance to win a family pass to the exclusive Australian Premiere in Sydney on December 7!

Knowing you are one of the lucky ones

I am secure, confident and strong, but the responsibility of protecting my children can almost bring me undone.

Why I am so emotional now I have kids?

There are so many ways in which parenthood changes us as women, but one of the most noticeable, for me, has been the changing state of my emotions.

Baby survives despite sharing womb with 'foreign body'

Baby Maia was conceived against the odds, only to find she was sharing a womb with an ominous "foreign body".

Video: Baby shows dog how to jump - or vice versa

They say dog is man's best friend, but this playful pooch seems to have chosen a jumping baby as her number one buddy.

10 ways to soothe a crying baby

New paernts can get frustrated when their newborn gets fussy and can't settle down. When you're feeling overwhelmed, try some of these simple tips to help soothe your baby.

20 baby names that are becoming more popular every year

The data-lovers at nameberry.com have been at it again – this time, they’ve discovered the names that are continually rising up the ranks, ready to take out some top spots in the next few years.

10 great meals to make for new parents

Ideally, you want to give food that isn’t expensive to make, isn't too difficult to create, and freezes well; stews, bakes, soups and pasta sauces are perfect.

'It's not you, it's me': Boston bombing survivor mum to have leg amputated

Rebekah DiMartino is going through a break-up. She even wrote a farewell love letter. But it's not to her husband.

What it's like to go through early menopause

In a cruel twist, Carla had been breastfeeding and perimenopausal at the same time. But she's far from the only one to go through menopause early.

Restaurant served alcohol to two-year-old

Busy restaurants can be forgiven for getting food and drink orders mixed up from time to time, but not when the confusion leads to a two-year-old being served an alcoholic cocktail instead of the child-friendly beverage they ordered.

Julia Morris tells of miscarriage on a flight

Julia Morris has spoken about the devastation of suffering a miscarriage while on an international flight.

Woman's survival after birth 'a story of two miracles'

A US mother is home and tending to her new baby less than a month after surviving without a pulse for 45 minutes.

Eating ice may give mental boost to the iron deficient: study

A new study proposes that, like a strong cup of coffee, ice may give those with insufficient iron a much-needed mental boost.

Tiny lives in caring hands: Thank U NICU Day

Each year in Australia, over 40,000 newborns need the help of a special care nursery or neonatal intensive care unit. One day a year, the staff are honoured by the parents they help through those dark days.

I paid $50,000 to have a girl

This time my husband and I hadn't taken any chances. We had paid $50,000 and travelled 13,000 kilometres to make sure the baby growing inside me was female.

Weird pregnancy products

Some pregnancy products come to market and are just awesome. Others just leave you scratching your head.

Dear firstborn, I'm sorry

Being a first-time mum is tough for so many reasons – particularly because you really have no idea what you're doing.

A trace of sesame could kill my son

Helen Richardson son's had two anaphylactic reactions in a month. It's traumatic for everyone.

When you know before the test says yes

It wasn't a pregnancy test or missed period that told me I was pregnant with my second baby; it was too early for those things. A doner kebab told me I was going to be a mum again.

What not to do when your partner is in labour

Robbie Williams stole the show during his wife Ayda's labour, pretty much demonstrating everything on the "what not to do when your partner is in labour" list.

Best maternity swimwear and beach cover-ups

Thinking about a tropical babymoon but have nothing to wear? Here are some great swimwear and beach cover-up options for mums-to-be.

Parents face bankruptcy after birth

A couple has been slammed with a $1 million medical bill after the early arrival of their baby while on holidays.

 

How many weeks til Christmas?

On your To-Do list

Get the "Santa" shopping done without the kids in tow.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.