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    • RhiannonEdmondson
    • By RhiannonEdmondson 9th Oct 16, 12:47 PM
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    RhiannonEdmondson
    Making an offer on a house that needs complete refurbishment.
    • #1
    • 9th Oct 16, 12:47 PM
    Making an offer on a house that needs complete refurbishment. 9th Oct 16 at 12:47 PM
    Afternoon everyone!

    I'm hoping someone can help point us in the right direction. My partner and I have seen a house we really like. It's a 5 bed semi Edwardian build in a nice area. It's on for £240,000. The house needs practically everything doing to it. It needs rewiring, the original windows need refurbishing, draft excluding and double glazing (many of them are stuck open or closed) there are no radiators in any upstairs rooms so will need radiators putting in and probably a new boiler to accommodate this. The Lead roof on the porch needs redoing, the guttering needs fixing, there's a leak in the roof which is causing damp in the master bedroom. The steps up to the house are cracked, the gate post needs rebuilding. I could go on...These are all imminent jobs and all before the fact it needs everything cosmetic I.e. Kitchens and bathrooms. Next door bought theirs in 2013 for £250,000 All done up. There are others on the road on for £250,000 now and they are also all already renovated. What kind of offer would you think I should acceptable but not too cheeky? We were thinking 170,000 or 180,000 to start negotiations. How high would you go? I think we are looking at at least 60 grands worth of work.

    Thank you in advance
Page 1
    • eddddy
    • By eddddy 9th Oct 16, 1:24 PM
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    eddddy
    • #2
    • 9th Oct 16, 1:24 PM
    • #2
    • 9th Oct 16, 1:24 PM
    I doubt that anyone with a house on the market at £240k would lake an offer of £180k seriously.

    If the house really is only worth £180k, you'll have to wait a good few months while the vendors gradually drop the price and realise that the best price they're going to get is £180k.

    Having said that, there's nothing stopping you offering £180k

    (Although, if you get a reputation with the EAs as "the people that make silly offers" and then move on, you may find the EAs take you less seriously in future.)
    • RhiannonEdmondson
    • By RhiannonEdmondson 9th Oct 16, 1:44 PM
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    RhiannonEdmondson
    • #3
    • 9th Oct 16, 1:44 PM
    • #3
    • 9th Oct 16, 1:44 PM
    Thanks for your reply, do you still think that even with all the work that needs doing and that all the similar houses on the street are on for around the same price are all ready all renovated? We looked round three others on that street too. We were going to offer 220 but then we took a builder with us on the last viewing and he quoted 60grand worth of works. Thanks again
    • david a
    • By david a 9th Oct 16, 1:52 PM
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    david a
    • #4
    • 9th Oct 16, 1:52 PM
    • #4
    • 9th Oct 16, 1:52 PM
    £170,000 to £180,000 as a starting offer means you'll probably end up paying £190,000. Which with your £60,000 renovations = £250,000. In my opinion offer £240,000 for one of the renovated house and save money and hassle.
    • Cakeguts
    • By Cakeguts 9th Oct 16, 1:56 PM
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    Cakeguts
    • #5
    • 9th Oct 16, 1:56 PM
    • #5
    • 9th Oct 16, 1:56 PM
    In some areas houses needing full renovation sell for not much less than ones that have been renovated. The reason for this is that some people want to buy a house where they have the chance to renovate completely to their own taste. So for example if you wanted to have a biomass boiler you would prefer to buy a house without a boiler than to pay for a house with a gas boiler and then change heating systems with all the associated building and redecorating costs. It depends on the area. If the house is in a particular area or the area is one that people want to live in then you won't get much of a discount on a house that needs renovation.

    My suggestion to you is that if you think that this one needs 60K of work and you need to offer low to afford to be able to do that you should consider buying one of the ones that is already renovated.

    Some houses needing renovation are sought after by people who want something with original fireplaces and internal fitments and decorations.

    The fact that next door paid £250K with the renovations complete doesn't tell you anything about how much people are prepared to pay for one that needs renovating. What you need to do is to find the selling price of one that needed work doing to it.
    • G_M
    • By G_M 9th Oct 16, 2:16 PM
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    G_M
    • #6
    • 9th Oct 16, 2:16 PM
    • #6
    • 9th Oct 16, 2:16 PM
    The seller knows it needs full renovation and will have taken that into account when setting his price.

    Yes, he'll be expecting/willing to accept less (unless he gets flooded with offers!), but 180 is a lot less. He might as you say use it as a negotiating start point. Or he might think the gap is just too wide to negotiate and simply say 'No'.
    • camptownraces
    • By camptownraces 9th Oct 16, 2:26 PM
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    camptownraces
    • #7
    • 9th Oct 16, 2:26 PM
    • #7
    • 9th Oct 16, 2:26 PM
    Can you find out the current index for house prices for the area, compared to 2013?

    House prices in some areas have risen massively since 2013. What went for £240K in 2013 could be worth 30% more now.

    Presumably you've looked at the "sold" prices of similar houses in recent years? And you've looked at 3 other similar houses that are on the market NOW for the same price?

    What does this one have in its favour - a sunny aspect, a bigger garden, parking space? if none of these things it's less stressful to go for somewhere which needs less work.
    • glasgowdan
    • By glasgowdan 9th Oct 16, 5:07 PM
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    glasgowdan
    • #8
    • 9th Oct 16, 5:07 PM
    • #8
    • 9th Oct 16, 5:07 PM
    If the prices have gone up, to an average of say £275k, then you'll need to offer £215k to have a chance. As a seller I wouldn't even reply to an offer of £180k, and would probably suggest to my agent they ignore your future communications.

    If I wanted £240k I wouldn't consider 220 either. But it sounds more reasonable.

    Also, remember these houses that have sold "already renovated" may not actually be. Have you a link to one of them for us to get a feel for what your thinking is? I bet if you'd gone to see them there'd be a list of jobs you'd want to get done anyway, which might have brought their cost, to you, up to £270k for example.
    Last edited by glasgowdan; 09-10-2016 at 5:10 PM.
    • FBaby
    • By FBaby 9th Oct 16, 5:47 PM
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    FBaby
    • #9
    • 9th Oct 16, 5:47 PM
    • #9
    • 9th Oct 16, 5:47 PM
    You can do the maths assuming that value of the house is equal to X - the costs of the renovation that YOU want to do. It doesn't work like that. My colleague has totally stripped her house down for refurbishment, and the bank valuation was done at that time, ie. when there was no kitchen at all, no bathroom, no boiler etc...She is going to do £20k of refurbishment, but even she was surprised when the value of the house as it was came at only £10K less than the same house that sold all modernised a couple of months ago.
    • nubbins
    • By nubbins 9th Oct 16, 6:11 PM
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    nubbins
    Like others have said if next door bought for 250k in my area it would be worth near on 400k now, not every area has gone up that much but you can have a look at Zoopla and that will give you a very rough idea what they say next doors is worth now. I suspect next doors is worth somewhere near 300k hence the 250k valuation, with a 170-180 offer two words spring to mind and they are hope and bob.

    60k sounds way over for the work listed
    • trailingspouse
    • By trailingspouse 9th Oct 16, 6:12 PM
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    trailingspouse
    You need to take a few things into account, apart from the basic 'How much it's on the market for' and 'How much the renovations will cost'. Here are some questions - only you know the answers -
    • How much can you actually afford?
    • How would you feel if it sold for, say, £5,000 more than your top offer?
    • Would you be prepared to live in a building site for a while - you don't have to do everything all at once. £60,000 sounds a lot if you were to spend it all at once, but spread over 3 years (that's how long it took us to renovate our Edwardian 4-storey townhouse) it isn't too bad.
    • How much of the work can you do yourself?
    • How long do you think you're likely to live there? Purchase price + cost of renovation doesn't equal selling price if you're not planning on selling. Having a house that you love is of much more value.
    • seven-day-weekend
    • By seven-day-weekend 9th Oct 16, 7:29 PM
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    seven-day-weekend
    We offered £10k less than the asking price of £145k on our bungalow as it needed loads of work. The offer was refused...but they did accept £138k.

    A similar bungalow down the road needing just as much work is still for sale at £145k because the vendor will not drop the price, it's been for sale for two years.

    Anyway..I think £180k is too low. I would offer £220k and be prepared to go slightly higher.

    Also, as someone says, some people,like us, actually prefer a doer-upper as you can do it to your own taste and style and there are often original features.. We have kept the original 1930s doors in our bungalow, just painted them instead of the brown varnish that was on them when we bought it.
    Last edited by seven-day-weekend; 09-10-2016 at 7:36 PM.
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    • getmore4less
    • By getmore4less 9th Oct 16, 9:23 PM
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    getmore4less
    As people say an early very low offer could get you locked out keep that so don't stick anything on the table too soon.

    open negotiations with the EA without a price, try to asses where the vendor/EA reality is, use your examples and the work needing doing, you need to get the vendors to make the first move down to close the gap
    • Thrugelmir
    • By Thrugelmir 9th Oct 16, 9:30 PM
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    Thrugelmir
    Speak to the EA. Their job to broker a deal. You may get a better understanding as to why the property is valued as it is.

    Your builder quoted £60k. That includes £10k of VAT you won't recover in terms of increased value in the house.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • anselld
    • By anselld 9th Oct 16, 9:48 PM
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    anselld
    Your builder quoted £60k. That includes £10k of VAT you won't recover in terms of increased value in the house.
    Originally posted by Thrugelmir
    ... and upwards of £20k profit by the sound of it.
    • jingles8384
    • By jingles8384 27th Oct 16, 12:05 PM
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    jingles8384
    We completed on our bungalow in August - 1966 3 bed and everything needed doing - boiler, wiring, windows, doors, flooring, decor, kitchen, bathroom, garage roof etc (we're not living there whilst everything is going on). We had 204k accepted (only 6k under the asking price) - others within 100yrds with identical layout that we viewed at the same time were on for 250k where they were already 'done'. I had a frank face-to-face conversation with the EA about the amount of work and the money we had and they pitched that to the buyer. We'll have spent around £30k by Christmas and will have all the 'big' stuff done - having said that we've been using independent people rather than one over-arching contractor doing everything.

    I think having a face-to-face with the EA is invaluable in these situations (and having a realistic vendor is also helpful!). Good luck
    • ellie27
    • By ellie27 27th Oct 16, 12:59 PM
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    ellie27
    Any update on this?

    Totally agree with just chatting with the agents. eg 'we think the selling price is a bit unrealistic, are the sellers really looking for x value?' We had a chat, something similar, and agents told us what the sellers would accept. OK they could have been lying and the sellers might have accepted less than that. But the price they mentioned was actually less than what we were prepared to pay up to! In the end they did accept less than the agent told us!
    • ReadingTim
    • By ReadingTim 27th Oct 16, 3:00 PM
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    ReadingTim
    Suspect the update is that the OP didn't get the answer they wanted to hear and are trying elsewhere for a more favorable response, because, ultimately, they can't afford the property.
    • bmthmark
    • By bmthmark 27th Oct 16, 4:25 PM
    • 130 Posts
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    bmthmark
    I was in a similar situation. I liked a bungalow that needed lots of work: new loft conversion, boiler, radiators, full rewire, kitchen, toilet, bathroom,all rooms need decorating with new carpet, garden needed new fences plus loads of other things like new turf etc.

    Due to all the work the property was on the market for ages and was advertised at £285k. When I looked at the property it had already been dropped to £265k and I put an offer in for £258k which was excepted.
    I have been in the property for a year and have completed nearly all the works. To date I have spent approx £60k.
    £60k seems a lot but this includes a new loft conversion with en suite. Similar properties down my road have sold recently for £330k so I should be fine getting money back.

    So no I don't think you are being cheeky offering a low amount as its clear you have to spend a lot on it. But you may have to wait a while before the price is lowered.
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