What offer to make on house?

Running_Horse

So you're thinking of offering £110,000 and then spending £25,000 on a house that will then be worth not much more than £100,000, and falling?

Walk away my friend, walk away.

maryotuam

The EA is lying as there are very few buyers around at the moment and as this house is not a bargain, it's extremely unlikely that a buyer has suddenly turned up out of the blue.
Why rush in at this moment when house prices are dropping drastically?

If you do make an offer, I suggest you don't go higher than £95,000!!!!!!!!

Incisor

Beckymarshall07 wrote: »

Hi all

Advice very much needed. We are FTB looking to make an offer on a semi. In short, house is priced at 130k. The vendor bought it 3 years ago for 107k. Theres not been too much work done to the house since it was bought in 06 other than central heating and cavatity wall insulation plus new boiler has gone in. House needs alot of work doing to it - we viewed it again yesterday morning and my dad whos a builder said it would need 20-25k spending on it (needs building work, new kitchen and bathroom and total redecorating etc etc).

OK, lets try and get a feel for the value. Houses are now worth what they were in 2004 - or something. So this one was worth 107 in 2005, which makes it worth say 101 in 2004. They have done central heating and cavity wall, which adds 6, making 108. Don't just take my values, work the same sums with your own assumptions.

Suppose the work is now done for 22, the value then will be 130, based on the purchase in 2005.

Problem is if we were to make an offer what starting offer should we put in? The house accross the road sold for 119k end of last year and dont think it needed work. Very few sales come up on the street as its good location. Houses priced very near by are on 122k needing no work 115k fo another 3 bed semi. The average price of a semi in the area where we are is 115k. House has been on market for 3 weeks and has had lots of viewings. Zoopla says its worth 113k but couldnt factor into zoopla that it needs lots of work. BBC price index saying that semi prices in the ares dropped 3.5% april-June.

[I have never got a sensible answer from zoopla.] If they are asking122, they might raise 112, which shows that the value of the one you are looking at is not 130 but 112 with all the work done. In other words, the price I estimated above is over by 18. The vendors probably overpaid for it at the time. As it was fairly recent and prices have fallen back to before the time they bought, they are not going to drop much for you until they begin to feel distressed.

I'm thinking of going in at 100k but just conscious of vendor thinking that wouldnt take less than what they paid for it. The couple feel that their house is well priced :rotfl:

Unsure if to put in offer and if so what would be the starting offer?

If 22 of work will make it worth 112, that means it is worth 90 now. I might offer 86, indicating to the agent that you must have regard for true market value ie you must be able to sell on without taking a hit, that you feel the vendors pain. In practice, with the vendors taking a loss, you will probably do no more than soften them up for the next offer from another potential buyer. But if they eventually come around, you could be prepared to do a deal at 92 to 94, paying a little over the odds

poppysarah

Offer 95 and let someone else pay over the odds for it and do it up. You can buy it done up in about 18 months I expect for about 60k

How much can you afford? You can't pay them over the odds for it if you will then have to borrow more money to do it up.
That'd be as stupid as getting 125% mortgage.

How much cash do you have? 25k to do it up and 10k for a deposit?

Beckymarshall07

We have 11k deposit and would look to take out an unsecured loan to do building work and then spend additional moneys in the future on the non-essential work to the house. This would be along term investment as we wouldnt be looking to move anytime soon!

What people have said on this posting makes sense but feel this really is our future home. I'm just deliberating whether to go in with an offer today or leave it to monday as my thinking is better to get in early than put an offer in if these other viewers make their offer first???? Still unsure about offer to make as house is in excellent location and properties on their peak have sold in the 130k's on the street. Very confused!

lynzpower

We have 11k deposit and would look to take out an unsecured loan to do building work and then spend additional moneys in the future on the non-essential work to the house. This would be along term investment as we wouldnt be looking to move anytime soon!

:eek:

Please please please think about this.

The house is overpriced- if one over the road needed no work and this one does....

Cavirty wall isnt expensive, in fact many agencies are giving this away free if someone isa on benefits/ tcs at the address, so discount that.

Borrowing unsecured for work against a house that is not rising in value ( its falling) is tremendously risky and I really feel this is a mistake.

Can you not wait to find one that doesnt need 25k worth of building work done?!!?!/
save yourself the moeny, for heavens sake.

Beckymarshall07

Hi Lynzpower - what would you do if you really wanted this house?

lynzpower

If I really really really wanted it, which I wouldnt to be honest, something that needs that much work ( and you know it does as your dad has said so, its not just a teeth sucking itll cost you quote from AN Other builder) Id be offering somewhere around 85-87.

I wouldnt tho, because I wouldnt borrow to "add value" to a property that is losing value BY THE DAY. Also you may well have problems mortgaging it if it needs structural work they may well put on a retainer. Have you spoken to your lender about this?

Beckymarshall07

Hi again - I did a bit of detective work and the house over the road at 119k was in a state - I thought it was already done when bought. If the house I'm interested in was 'done' it would easily fetch 130k. Just needs the work doing to it. I've said to hubby this morning that is it worth it as we would prob break even with offer on it plus work to get it up to its potential market value. Having said that it would be a long term investment as we dont plan to move for quite a few years!

Cannon_Fodder

there are so many others houses around at the moment, what makes this THE one...

?the price, because it needs the work, its the only one in your price range?

if so, wait 6 months, and the ones that don't need work at £115 and above will be under £100K...