Landlord wants to sell house I'm living in

[Brett Mather]

My family moved to Scotts Vally, California in August of 2020 and rented a townhouse with a 12 month lease. The owner recently contacted me and expressed his desire to sell the house and offered it to me. If I choose not to buy he expects to put it on the market (which seems high-demand/low-supply) later in the summer and allow me to stay through the lease. The owner is willing to do the deal without agents so he'd save ~5% on the fees and offer us a lower price than he'd list it for on the open market.

My family loves the house and area and we think we'd like to buy.  I believe we have the means to do so (I do have plenty of work/research to do on that front) but my primary question is how to determine a fair price? He purchased it brand new in Feb. 2020 for $998k and said he believes he could list it competitively on the open market for $1.1M (he did make some improvements to a closet and backyard, but not too extravagant). He'd sell it to use for the $1.1M minus 5% for $1,045,000. 

It sounds like a decent deal, but I'm not completely convinced that it would sell so easily for $1.1M on the open market. How should I go about building a convincing argument for the value of this house?