Buying Your Rental Condo

Welcome to Behind the Before & After | Buying and Selling - where I share, step-by-step, how I help all kinds of buyers and sellers reach their real estate goals. Whether you're downsizing, out-growing a home, or house hunting for the very first time, I know the challenges, and I know how to help you through them! Below, Buying Your (Condo Building) Rental in Central Square, Cambridge -

How We Met

I met Buyer D when he was a Cambridge renter and I placed him in a Central Square condo owned by a client of mine. Buyer D was a great guy and a pleasure to work with and he turned out to be a fantastic tenant. He loved the location, the small condo building and his new neighbors. 

Clockwise from upper left: the condo entrance, junk to be removed, the small condo building, Cambridge City Hall in Central Square.

The Search 

Two years later, the landlord, who was a long-term client of mine, expressed to me an interest in selling her condo. When she and I spoke, we discussed the possibility that Buyer D - her tenant - might want to buy it. Transactions like these are pretty common, but not without challenges. When a landlord wants to sell a unit, and the current tenant is interested, it ultimately comes down to a few things - 

1 - Is the tenant actually financially qualified to buy? 

2 - Can the buyer and seller come to an agreement on price?  

3 - What kind of representation does each party need?

In this case I was the agent for the landlord, ie, the Seller; I had handled renting the condo for her for years. As the Seller’s agent, I drafted up pricing for the Seller and we discussed the numbers. We presented the price to Buyer D and he agreed that he would pay the price the seller wanted for the unit. 

Buyer D opted not to have representation. However, he trusted me to guide him through the purchase. I was committed to treating him fairly and ethically - as a person and as a Realtor - although my ultimate fiduciary responsibility was with the Seller, in this case.  

But on behalf of the Buyer, I was able to connect him with a lending partner, to get pre-approved, and to begin the process of purchasing the unit. 

Buyer D did a full home inspection, even though he was already living in the unit. This inspection revealed some minor issues, we negotiated a bit, and the Seller ultimately agreed to give him a credit for some repairs. 

The Seller lived out-of-state and the storage space that came with the unit was full of stuff from years ago, when her son lived in the condo.  As a service to both Buyer and Seller, I arranged to have the space cleaned out before the condo, and its storage space, changed hands. 

Not much of a search in this case, on either side. The Buyer was already living in a place he loved, and the Seller had a ready, qualified buyer. 

The Challenges

Things were moving along pretty smoothly, until we hit a major snag at the last minute. The condo building was a seven-unit association, and three of the units were owned by the same entity - not quite a majority ownership, but still worth noting from a lending perspective. We had checked on this up front, with the lender that Buyer D was working with, and they had said that this wouldn't be a problem. Unfortunately, just a couple days before the mortgage commitment was due, the loan underwriter ultimately decided that they could not finance the transaction, due to this ownership situation. 

Thankfully, I knew another reliable lending partner, who specializes in portfolio lending - in portfolio lending, a bank is more able to work with non-traditional terms and non-conforming buildings. Now, typically these loans may require a 20% minimum down payment, or have a higher interest rate. Buyer D was not putting 20% down and it was unclear if the new bank would allow him to finance the property with less than 20% down. But the new bank got approval to do a 15% down payment and in the end, Buyer D was still able to buy the condo for the same price, but with a slightly higher monthly payment. 

The Outcome

Buyer D was very happy because he didn't have to move, or look for a new place to live. He made a few fixes with the credit from the home inspection and the condo he loved was his. The Seller was also very happy - she didn’t have to worry about repairs, or preparation for open houses and photography from out-of-state. She was able to sell her property at a fair price, plus, she knew her former tenant loved the place and she was happy to help him become a homeowner. Thanks for the kind words, below, Buyer D -

“Jen is an incredible realtor and such a pleasure to work with! The knowledge and professionalism she provides to her clients is simply unbelievable. I first got to know her as a renter in 2020 and, more recently, I worked with her as a first-time home buyer. Her dedication was literally the only reason that I was able to close on a transaction that nearly fell through mid-contract. From start to finish, Jen made the process of buying a house -- something that I always thought was very hard -- feel quite easy. This is an amazing skill! I owe her much more than the words in this review, but I want to say that anyone who works with her will be very grateful for having made such a good decision. She has my highest recommendation and all my praise.”

For this and all my online reviews, please see my Google Business page. For more case studies of how I help buyers and sellers, explore my whole series Behind the Before & After | Buying & Selling.