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I want to buy the house I’m renting, Is this possible?

I got this email the other day and I said “Possibly” as it really isn’t a yes or no question without finding out some other facts about the property first. The first is, “Have you been pre-approved for a loan by a mortgage broker?” This is a very important step because if you can’t get pre-approved, then there is no reason to even ask the other questions or even approach the owner of the property.

For rent or for sale? Can you buy the property you are renting?

OK, you now have a pre-approval, the next question we need to find out is the seller even willing to sell? Some people consider this the first question, but I find the owners tend to get upset when you ask, they say yes, and a week later you come back and say, “Sorry, I don’t qualify for a loan”.

If you have been pre-approved and your landlord says, “Yes, I’ll sell it to you”, then you need to ask the tough questions or have a professional real estate agent or real estate lawyer ask the tough questions of your landlord.

  1. Do you own the home free and clear? (If no, then you need to ask question #2)
  2. Will the home appraise for the amount you need to sell it for to pay off the loan? (If no, #3)
  3. Since the home isn’t worth what you owe are you willing to come to the table with the remaining balance to close?

If they answer no to number 3, then you are pretty much dead in the water. The main reason is that you have to do a short sale on the property to get it to close and one of the first questions the bank will ask upon the offer coming in is, “Is this an Arm’s Length transaction” and with you living in the property, the bank doesn’t consider this to be an Arm’s Length transaction and will stop the sale in its tracks.

So, once again, if you want to buy the property you are renting, ask the tough questions and find out, it may just be possible!


Respect Realty LLC (Expect More)


At Respect Realty, LLC our agents believe in 100% dedication to client satisfaction.  We specialize in property and land acquisition around the Portland Metro and Vancouver, WA area. We delight in working with first time home buyers and sellers to guide them from start to finish. Our doors are always open and we are always happy to assist you with your real estate questions.


Reach out today, we look forward to talking with you!


Todd Clark and Seraina Aguayo (Owners of Respect Realty)

Respect Realty LLC (Expect More)



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Comment balloon 18 commentsRespect Realty LLC • December 30 2010 08:00AM


Oh did your post hit home. I had a client ask if they could rent with option to buy a shortsale listing.

Posted by Ellen Dittman, #1 Stop for NE FLA-JAX/OP 904.535.1199 (TEXT OK) r (Watson Realty Corp.) over 8 years ago

Todd - I have also been asked this question.  I like your concise well organized answer.

Posted by Pam Dent, REALTOR® - Charlottesville Virginia Homes / Horse (Gayle Harvey Real Estate, Inc.) over 8 years ago

Todd * I agree * if the resident is NOT pre-qualified, there is NOWHERE to go in the discussion including opening a dialogue with the owner.

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) over 8 years ago

Todd, it's nice to see that another Realtor thinks the first question is "Have you been pre-qualified?"  So many agents don't ask that!

Posted by Toni Weidman, 26 Years Selling Homes in New Port Richey, FL (Sailwinds Realty) over 8 years ago

Oh, I think we all get asked that question and your response is dead-on!

Posted by Lori Cain, Midtown Tulsa Real Estate Top Producer (eXp Realty) over 8 years ago

That's a question asked quite often by renters and also by some sellers when they're having a hard time selling their house. Lease to own.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 8 years ago

Todd - question one is crucial and many renters/buyer wannabes may not consider it first.  Preparation is so important. 

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 over 8 years ago

Todd, I had one yesterday and the landlord got the call before me & told him there is no way he'd sell it...but the renter is now on my list to buy at some point & is i need to fine someone to sub-let his rental...great post on the questions that are relevant today.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) over 8 years ago

Todd, great info....I hope you enjoy the rest of 2010 and have a successful 2011 too!

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) over 8 years ago

Great sequence of questions.  Sometimes people wonder why I always ask first "Have you been pre-approved for a mortgage."  If the answer is, "I am just looking", then it makes me wonder how serious they are about buying a house.  Happy New Year!

Posted by Kathryn Maguire, Serving Chesapeake, Norfolk, VA Beach ( (757) 560-0881) over 8 years ago

Sorry Todd,

I just can't agree with your approach to the tenant that want's to buy the house he's renting!

I've sold allot of properties the owners didn't know were for sale, including SFR's. Your out line offers only slight hope of success.

First, I'd explain my services and fees.

Second, I enter a true Buyer's Broker agreement, with the buyer paying me.

Third, I don't believe in sending my clients to a mortgage broker, I take them! Better yet have the LO join us at my office!

Fourth, I'd order a property profile from my favorite title company!

Fifth, I'd check public recorders on the seller.

Sixth, from the property profile I'd know if the property was financed , for how much and when. Armed with this information and a financial calculator I could come very close to most first mortgage balances.

Seventh, I'd prepare a detailed CMA! I'd know what the property is worth.

Eight, I'd review the preapproval with my clients and the LO!

Ninth, I'd review what I'd discovered about the property, the loan, and the seller with my client!

Tenth, I'd prepare an option agreement to present to the sellers.

Options are much more likely to be accepted than your standard O & A! I'd offer a reasonable option payment to be credited towards the the purchase price.

(Owners are much easer to deal with if you're not asking for a commission. I'd list my commission on addendum. The addendum will amend the purchase price to included my fees, because the Mae triplets are not very bright and don't recognize buyer broker's fees as part of the purchase price. By putting it on an addendum it's the last thing you present after agreeing on a net to the seller.)

Eleventh, I'd have the second best salesman in my office make an anointment for me with the sellers.

You never, never, never, never, never ask "Wouldyasell? Or "Wouldyasell? You present an offer!

In the case of a short sale, I'd have a notice ready advising the seller to use an attorney or other professional. I'd explain I could deal with their bank, but I have a conflict of interest, my fiduciary lies with the buyer. I'd have this notice signed by all sellers!

I'd also have a document ready already signed by the buyers alowing me dual agency if signed by the sellers.

Listing agents ask "would you sell?" Proffesiomal buyer's brokers present offers!


Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) over 8 years ago

Todd - love the sign, and I like the topic, we will see a lot of this in the next 3 years I think.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) over 8 years ago

Bill, I don't want to scare them off, you could have them in the office all day! I want to give them the reality upfront then, we can proceed to exactly what you are saying. Thanks for the call this morning and have a wonderful new year yourself. I do love your approach to real estate though, talk long enough with them until they say "Where do I sign to get rid of you?" -LOL

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) over 8 years ago

Todd - I sold a property to a renter for the first time this year! The tenant was pre-approved, we looked at some homes and the buyer said "actually, I'd really like to buy the house I'm living in". So I checked property records (free and clear), called the property management company and asked them to get me in touch with the owner. YES, the owner did want to sell! We negotiated a price and we closed within 30 days. YES, it is POSSIBLE!

Posted by Cynthia Larsen, Independent Broker In Sonoma County, CA over 8 years ago


Amazing the conversions that can take place when we think out of the box. You are a guy that sees all the angles.

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) over 8 years ago


Amazing the conversions that can take place when we think out of the box. You are a guy that sees all the angles.

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) over 8 years ago

Sometimes, tenants are the best possibilties to purchase the home.  In most cases, the tenant can pay less for a mortgage than the rental amount. (If they have any money saved to work with and good credit of course).   

Posted by Renee Marrs Caperton, Realtor - Corsicana Texas Real Estate (Marrs & Associates) over 8 years ago

Many people feel comfortable renting because you don't have to worry about maintenance, long term commitment, taxes, HOA fees and staying in one place for over a year. Everyone must decide what is better for their situation. When you are ready, willing and able~ call your local trusted Realtor!

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) about 4 years ago

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