Mentioned to my managing agent that may wish to sell rather than let the tenant sign a new lease. They then advised the tenant expressed an interest in buying.
Has anyone sold direct, bypassing using an agent? If so how did you go about it and any tips to ensure a good deal for all? Or has anyone had any bad experiences doing this?
Has Anyone Sold Their Investment Property to the Tenant?
LCswillis on 23/02/2020 - 13:33
Comments
Likely the managing agent will try and claim that they introduced the tenant/buyer to you and will claim agent fees.
Of course they will but there is no clause in the tenancy agreement to prevent this.
They can’t claim agent fees if there is no Agency agreement for a sale of property. The existing agreement is purely for residential tenancy management.
The managing agent will likely be interested in 1) making a commission from the sale or 2) keeping the rental going as they will keep on getting commision.
What you should do is 1. get your solicitor to prepare a contract of sale 2. get the tenant to look at it 3. if they are happy and willing to proceed, get them to go through the normal sale process ie. deposit (preferably waiving any cooling off period) and exchange contract. Once exchanged, I will advise the managing agent and rescind management agreement to time in with settlement date.
Just check that your PM agreement doesn't have a clause that says they get a commission if you sell to the tenant.
I was the buyer of such a property. The agent charged the seller his usual fees without the advertising costs. The seller was a tight-arse and I'm sure she would've tried to get out of any fees she thought she could've.
Not quite.We sold one of our IPs to a friend of our tenant. The RE tried to charge us a sale commission fee which we refused to pay. The only contact they had with the buyer was when he approached them to ask if we were interested in selling our property. The RE took their sweet time to forward that email to us. In the meantime, our tenant who had our email address contacted us to let us know that his mate was interested in buying the property when they move out. All negotiations were between us and the buyer.
This article on 'Selling Investment Property to Tenants: Dos and Don’ts' may be of interest.
… any tips to ensure a good deal for all?
The goal is to get the best deal for you. Research recent sales in the area to gauge expected market price range so that you make informed decisions when you commence negotiations with the tenant or other prospective buyers, as the case may be.
Thanks for all the comments. My tenant and I are not aligned as far as $$$ is concerned so will not be going down this route, unfortunately.
by how much, 5%? 10%?
6%. Agent will take 1.5%
Agreed on price, exchanged $$. Job done.