First Home Buyers · September 2026 · 8 min read
A private sale between you and your landlord is a normal purchase as far as a lender is concerned. The valuer still comes out, the contract and the duty are still there, and the discount usually shows up as a smaller loan rather than instant equity.
Photo: Philip Mallis from Melbourne, CC BY-SA 2.0 via Wikimedia Commons
There was a woman at a workshop I ran a couple of weeks back who is buying a house that was never on the market.
She rents it. Has done for years. Three bedroom townhouse, and the bloke who owns it is ninety one.
So she asked him. That is the whole move.
Most people believe a house has to be listed before you can buy it. It does not. And the part that surprises people most is that the loan side of a private sale is boring. A lender does not care whether there was an agent involved.
The private sale in one view
A private sale, or an off market sale, just means the property changes hands without a public campaign. No listing, no open homes, no auction, no other buyers turning up on a Saturday to bid against you.
It is legal in every state and territory. A vendor is allowed to sell their own property, and a buyer is allowed to approach an owner directly and ask.
What does not change is the paperwork. There is still a contract of sale, there is still a settlement date, and there is still a conveyancer or a solicitor on each side doing work the agent was never doing anyway.
In Victoria the seller still has to give you a vendor statement, the section 32, before you sign. Other states have their own version of the same obligation. Those disclosure duties sit with the seller whether or not they hired anybody.
This is the bit people assume will be a problem, and it is the bit that is most normal.
When you apply, the lender orders a valuation. That is an independent valuer who inspects the property, or in some cases assesses it off recent sales data, and tells the lender what the place is worth.
The valuation is not there to check your negotiating. It is there because the property is the lender's security, and the lender wants to know what that security is worth if everything goes wrong.
ANZ explains the mechanics plainly on its own site. The lender works the loan to value ratio off the valuation figure, and loan to value ratio is just the size of the loan measured against what the property is worth. In ANZ's own example, a five hundred thousand dollar purchase that values at four hundred and fifty thousand has the ratio calculated on the four hundred and fifty.
Here is where private sales catch people out, and it is the opposite of what they expect.
If your landlord gives you a good price because they like you and they cannot be bothered with a campaign, most lenders will still work off the lower of the price you agreed and the valuation. On a purchase, that is usually the price.
A fifty thousand dollar discount usually means a smaller loan, not fifty thousand dollars of instant equity.
So a fifty thousand dollar discount does not normally land in your lap as fifty thousand dollars of equity on settlement day. It lands as a smaller loan, which is still a very good outcome, just not the one people picture.
Some lenders treat this differently where the sale is between family members, sometimes called a favourable purchase. That is lender by lender policy, it varies, and a landlord you rent from is generally not a family member. Worth asking before you assume it applies to you.
Cutting the agent out does not cut the government out.
Costs that remain
Stamp duty, or land transfer duty depending on your state, is still payable. Registration fees are still payable. Your conveyancer or solicitor still charges for the work.
First home buyer concessions, state grants and the federal guarantee schemes are assessed on you and on the property, not on how the sale was arranged. Those rules move and they differ by state, so check them at your state revenue office and at Housing Australia rather than taking my word for it or your landlord's.
The loan is the easy half. The conversation is the hard half, and there is no script for it.
What helps is understanding why it might suit them. A vendor selling privately does not pay a selling agent's commission and does not pay for a marketing campaign. They also do not have the place sitting empty between a tenant moving out and a buyer settling, because the tenant is the buyer.
For an older owner in particular, a sale with no campaign, no strangers walking through the lounge room and a settlement date they get a say in can be worth more than squeezing the last few thousand out of the price.
What does not help is walking in with a number you made up. Get a sense of what similar places nearby have actually sold for before you open your mouth. Sales data is public in every state and a conveyancer can pull it for you.
No agent means nobody is managing the process, and that cuts both ways.
Protect the purchase
Get your own legal representation. Do not share a conveyancer with the vendor to save a few hundred dollars, because the moment there is a disagreement about the contract you want somebody whose only job is your side of it.
Do not hand over money outside the contract. Not a holding deposit, not a good faith payment, nothing. It goes through the proper channel or it does not happen.
And get your finance position sorted before you agree to anything firm. A private seller who has never done this without an agent will not know what a finance clause is or how long an approval actually takes, and a settlement date plucked out of the air is how these fall over. Our borrowing power calculator can help you start checking the numbers before you make an offer.
Two things worth adding.
If you are renting privately near a base and you like the place, this is a thought for before your next posting cycle rather than after it. A purchase is not a fast process and a posting order does not care about your settlement date.
And if the Defence Home Ownership Assistance Scheme is part of your thinking, how you found the property makes no difference to it. What does matter is that it is a scheme for a home you live in, the subsidy attaches to a loan held with a lender on the approved home loan provider list published at dhoas.gov.au, and eligibility, service credit and entitlement are determined by the Department of Veterans' Affairs. Not by a bank and not by a broker. Vairo Finance is not a DHOAS loan provider. The official calculator and the current provider list sit at dhoas.gov.au, or you can call 1300 434 627.
A house does not have to be for sale for you to buy it.
The lender treats it like any other purchase. The valuer still comes out. The contract, the duty and the conveyancing are all still there. The discount, if you get one, usually shows up as a smaller loan rather than as instant equity.
The only genuinely hard part is asking, and the cost of asking is a slightly awkward conversation with somebody you already pay rent to every fortnight.
If you are renting somewhere you would actually buy, have you ever asked the owner, or have you just assumed the answer?
This article is general information only. It does not take your situation, objectives or needs into account and it is not credit advice or a recommendation of any product or lender. Stamp duty, grants and state concessions differ between states and change over time, so check the current rules with your state revenue office and with Housing Australia. Contract and conveyancing questions belong with a solicitor or a licensed conveyancer rather than a broker. Vairo Finance is not a DHOAS loan provider, and eligibility, service credit and entitlement for Defence housing schemes are determined by the Department of Veterans' Affairs, not by us. Vairo Finance is a credit representative 581146 authorised under Australian Credit Licence 389328. Speak to us about your own circumstances before acting on anything here.
Keep planning
Read what to check in a contract of sale, understand what happens before settlement, or talk through a private purchase with Vairo Finance.
The information in this article is general in nature and does not take into account your personal circumstances. Speak with a qualified mortgage broker before making lending decisions.
