If you want to sell a property to a tenant, then the procedure is much the same as it would be if you were selling it on the open market. There are advisable steps to take, however.
Ending the tenancy
As landlords should give a minimum of two months’ notice and a tenant one, the simplest way is to agree to one month between exchange of contracts and completion. The tenant would then give notice upon exchange.
Agreeing a price
It’s wise to get the realistic valuations and advice on current market conditions from several agents. Otherwise, you could get an independent valuation from a RICs surveyor. If you think you could achieve a higher price, you could try marketing the property for several weeks to gauge interest, before giving the tenant first refusal.
Letting agent fees
If the letting agent played in part in negotiation, then your agreement with them may well mean you have to pay them a fee. In fact the contract might demand a fee – typically around 1% to 2% – even if they were not involved, so do check carefully.
It could be worth instructing an agent. A good one can act in your interests, check the mortgage offer is in place, liaise with solicitors, address any issues at an early stage, keep you updated regarding progress and assist with any additional negotiations.
Solicitors and conveyancers may vary widely in how they work, especially if required to deal with an unfamiliar issue. Landlords selling to tenants is fairly rare, so using a lawyer who lacks experience could result in delays.