Q&A: My Landlord Wants to Sell the House to Me as the Tenant. What Should I Check First?

The question came in from a renter whose landlord had offered to sell them the house they had lived in for years. No agent involved yet, a number already floated, and a feeling that this was a lucky break they should not slow down. My answer was that it might well be a lucky break, and the way to protect it is to treat it like any other purchase. Here is the short list I walk tenants through.

Start with price. A landlord's number usually comes from one of two places: what they believe the house is worth, or what they need to net after their own loan and costs. Neither is market value. Ask an agent to pull recent comparable sales in the neighborhood, or order an appraisal, before you respond to the number. It gives both sides a shared reference point, and a fair seller will respect it.

Next is condition. Tenants often skip the inspection because they already live in the house. Knowing that the dishwasher is loud is not the same as knowing the age of the roof, the condition of the water heater, or whether the panel is a type that insurers question. Hire a licensed inspector. Anything you negotiate now is money you would otherwise spend on your own after closing.

Then talk to a lender early. Ask what you qualify for, what the monthly payment looks like with taxes and insurance, and what closing costs to expect. If the landlord offers to credit some of your past rent toward the purchase, ask the lender how that would need to be documented, because lenders have specific rules about rent credits and seller concessions. The order matters. Agree on terms first and discover the financing problem second, and you have negotiated against yourself.

Finally, use a real contract. A written purchase agreement with an inspection period, a financing contingency, a clear closing date, and a title company handling escrow protects both of you. What trips people up is not bad faith. It is skipped steps. Questions about the contract language belong with an attorney, and questions about the tax side of the sale belong with a tax professional.

Buying from your landlord removes friction: no showings, no competing offers, no moving. It does not remove the need to know the value, the condition, and your own financing. Check those three and the lucky break stays lucky.

This is general information, not legal or tax advice.

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Jon Hegreness, REALTOR / Associate Broker, Howe Realty
(623) 826-0888 / JonHegreness@gmail.com / License BR540940000
9059 W Lake Pleasant Pkwy, B-200, Peoria, AZ 85382
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