How To Tear Up Your Lease & Kick Out Your Landlord

What is it worth to you not to have to move? Judging by my two decades in real estate, I can tell you most people value inertia very highly. So much so that they end up not buying at all. Our deal of the month takes you inside the life of a couple who were able to do both: they bought, AND they didn’t have to move. But how do you do that? 

You buy your rental apartment. 

It's Easy, and It's Not So Easy for the Landlord

Here’s why most landlords would love to sell their property to their tenant:

(1) they don’t have to carry a vacant apartment for one single day. They connect rent until the closing day. Unusual, and a nice benefit. 
(2) they don’t have to spend a dime on staging, or listing preparation. (I've written about sellers who ignore staging at their peril.) The buyer is already sold, as it were. 
(3) the tenant was already approved once by the building’s admissions committee. Therefore, they are a very safe bet. 

On the other hand, here’s why landlords might be reluctant:

(1) the tenant may think they are in a powerful position to negotiate.
(2) the tenant may find ways to delay a closing and there’s no recourse.
(3) the landlord is often in a contractual relationship with the agent who found his tenant, and he doesn’t want to pay as much commission to the agents involved. Lord knows we've been in situations where a landlord tried to go around us in the past. But that's a story you can find in The Pursuit of Home, my new book (pre-order here!)!

The Buyers' Considerations

Of course, buyers have their own pros and cons to consider. Their pros:

(1) they don’t have to move.
(2) they know the good and bad about the building.
(3) they know the good and bad about the apartment. 
(4) no new furniture to buy!

The reluctance may come from a few spots:

(1) the landlord is difficult to work with.
(2) the agent representing the landlord is a pain.
(3) it may be cheaper to rent than to buy, and that’s before they fork over their 20-50% downpayment. 

traveling without moving? a great album, and what these buyers endeavored to do

The Scene

The renters brought me in because of, not in spite of, all three of these last reasons. The listing agent for their apartment was difficult to engage with… No trust. The landlord didn’t engage with them the year before when he put the apartment up for sale and wouldn’t negotiate…bad vibes. And, indeed, every month they didn’t own the apartment was cheaper and allowed them to save more and more money…no urgency. 

However, they had a baby and now, another on the way; owning their home became a priority. They needed guidance. Not wanting to interface with their landlord directly, they were given my name because I had completed 3 transactions in the building. One sit down meeting and I was negotiating with the owner’s representative, the agent who had rented the apartment to them eighteen months earlier. 

The Negotiations

So far, so good, right. Well, not so fast. It took us more than a month to negotiate a deal on this $1.5mm property. Was it because the seller was losing $150,000? That might have been the case. Was it because there were $20-30,000 of repairs to complete before the work was done? That, too. Or was it because the renters knew where all the bodies were buried, and therefore knew exactly what to ask for, and what buttons to push?

I would add that like dogs, owners choose attorneys that are like them. Makes total sense, but it doesn’t make negotiations easier when the attorney is as much of a nudnik as the seller. Alas, it makes for pointless confrontation. I mean, we aren’t negotiating a peace treaty. We’re looking for win-win situations, if at all possible. But agents work through it, time and time again.

Fast forward past the boring contract stuff to a weirdness. For some reason, the landlord-now-seller wanted the contract price to be a little higher, and offered free rent to get the price he wanted. I have to assume he was anticipated an issue with the co-op board if the price was too low—a common issue which I’ve covered before. We then aimed to make the closing coincide with the end of their lease, but no one could predict whether we would succeed. 

owners who look like their dogs. in real estate, attorneys look (or act) like their clients, too.

The Drama

Just when you thought we were out of the woods! Here's what happened in the intervening time. 

1. there was a leak in the floor from the fridge

2. There was a leak in the ceiling from the hvac

3. There was a repair that went sideways in the bathroom

4. The coop board delayed the closing by 2 extra months for no obvious reason. 

 
Despite all the initial drama, and the incessant and pointless pestering by the listing agent, the buyers and seller were quite cordial through a lot of mess. And we closed without further fanfare. We’re delighted for our buyers, who indeed get to stay in place and focus on their baby on the way! Congrats to them and thank you to our ever-diligent attorney team at Cassin LLP of Steve Ebert and his associates.  - Scott & Magnetic