Current value of our unique period property!

liberty_lily

Hi everyone!

We purchased our very unusual character property in November 2007. We were cash buyers and do not have a mortgage or other debt secured on it.

It is a detached 5 bed arts and crafts style house with many original features. However when we bought it the house had not really been touched for many years - the decoration was last done in the 1980s (orange walls, pine kitchen, shiney wallpaper, melamine built-in wardrobes etc) and it was in need of TLC.

Obviously despite this because of the property boom (and the fact that the property had bags of potential) I suppose we paid a fairly high price, although as prices were just starting to slow down the price had been reduced by around £25k I believe.

As we intended this to be our home for a long time, over the last three years we have spent in excess of £50,000 putting in a custom built solid wood, hand painted kitchen with granite worktops, two new bathrooms (including adding an ensuite), rebuilt the rotten conservatory, added ceramic tiled floors to conservatory and bathrooms, had remedial electric work carried out, landscaped the gardens and redecorated throughout.

Unfortunately due to work commitments and family reasons (elderly parents living 150+ miles away) we now need to relocate asap so called in the local estate agents to value our house.

So far we have only had two round (a third is booked) and they both advise waiting till the new year, but then marketing it at a similar price to that which we paid. This is based upon the fact that despite the drop in prices (around 10% in our area), the work we have done to improve the property has increased its value by a comparable amount.

As our house is totally unique in this area there is absolutely nothing to compare it with - it is on an estate originally built in the 1920's but which was never completed due to the inset of WW2 and since populated with 50's, 60's and later bungalows mostly of the 2 bed variety............

We are not sure whether to take the estate agents' recommendations at face value and because of the difficulty in finding anything to compare it with as well as the fact that what we have done has undeniably added value, we are not sure how to price it when we put it on the market after Christmas. I might add that one independent agent was very condfident (despite all the negative media hype) that prices will rise in the new year!

I have had a look on one of the websites (nationwide?) where you can check the current value of a property compared to what it cost at a certain time, but that obviously doesn't take into account any improvements carried out in the interim.

I have also looked at what the previous owners paid for it in 2004, but again then it was in an unmodernised condition (I don't think they knew what a paintbrush was to be honest) and as we know the guy who owned it in the 1980's we have it on good authority that the last time it was decorated was when he did it, so it doesn't seem right to be basing the current price on the value back then when the condition was so different.

As we wish to sell quickly in order to be in a position to relocate asap we don't want to over-inflate the price, but honestly don't know how to value it

Furthermore, we are aware that because it is so unique it may not appeal to the traditional buyers in our area - we lived 150+ miles away when we fell in love with it on Rightmove and one EA said the next buyer will probably do the same.

If anyone could shed any light on how to go about the problems re: pricing - or whether we just take the EA's word for it I would be most grateful!

Many thanks and apologies for the lengthy post!

LL x

CloudCuckooLand

You don't need comparables. You set the going price for it recently enough, when you bought it. You cannot get more comparable that the house itself.

Buyers will see that, and easily adjust for market movement since that date, using Nationwide/Halifax/Land Registry. Depending on the region, each may or may not be more relevant.

Whether buyers will agree that what you have spent on improving it adds less/that/more value will depend on a buyer's opinion/standard of finish etc.

Buyers may also speculate why such a special, one-off, unique property is changing hands for the third time in 6 years. It may even put a few people off, wondering if its a money pit.

Suggest you re-read your post, and try to find an honest friend to take you through it and point out the obvious bias within. Its natural. But if you really do not want to be chasing prices down in 6 months, you have to be realistic now.

Agree that you may as well wait to the New Year. Too may bargain hunters in the run up to Xmas.

clutton_2

i had a similar property in the late 1980's - almost impossible to value a there were no comparables....

i got 3 quotes and they ranged from £95k-£129k - percentage wise that was a heck of a difference in prices.... i took the middle of the range and it still did not sell...

Since being in the property business now for 11 years, i have realised that not all improvements actually add value to a property... the number one added-value is a 2 storey extension....

Making a property "lovely" (and i certainly dont say that with any degree of disparagment whatsoever) certainly gives it a "wow" factor, but i almost guarantee that the £50k you have spent will not be recoupable.....

As to value.... i think you can only go with your local agents... no one knows your local market more than them...

Myself.. i would always choose a small independent EA who has been in the business for a long time if there were one in your area... they have their reputation to lose if they over/under value significantly often.. and they cant afford to lose it.. EAs from Big chains (often owned by banks and franchises) come and go.......

liberty_lily

Thanks CloudCuckooLand - I appreciate your comments!

Unfortunately the previous owners purchased the property as they had elderly parents who came to live with them - in 2005 (one year after they purchased) one parent died and within three years the other had to go into a home. They also had two sons who left to go to uni/get married during their three years in the property, so the house became to large for them and selling was unavoidable.

Apart from the usual upkeep associated with an older property now that we have done most of the hard work, I wouldn't consider it a money pit - although it wouldn't appeal to the type who likes a new house with no features!

We did look into the idea of my parents coming to live with us, but they are not prepared to up sticks and move 150+ miles after 40-odd years in the same house. As they are in need of assistance on a regular basis (my mum has since we moved here been diagnosed with alzheimers and my dad at 82 finds caring for her on his own quite trying) and I'm an only child with no-one to share the responsibilty, I have no option but for us to move closer to them.

Realistically we know we won't get back the value of the work we've done and if we had been doing up the house intending to sell we would not have gone for such top spec fittings (Villeroy & Boch sanitaryware, granite worktops etc), but hey-ho!

We are prepared to take a drop on what we paid - it's not like we have a mortgage/equity problem - but it's just hard to set a realistic price based upon the work we have carried out.

There's no way it could be argued that what we've done has decreased the value - everything done to the house previously was obviously done using the 'cutting corners' method, whereas we try to do everything to a very high standard - but I admit our style will not be to everyone's taste (but then whose is?).

To give an example a previous owner had put down a decking path through the garden which was just ordinary timber intended for internal use - the first time it rained really hard after moving in I slipped and nearly broke my neck!

Getting a friend to view and give advice is a good idea - thanks for that!

LL x

liberty_lily

clutton wrote: »

i had a similar property in the late 1980's - almost impossible to value a there were no comparables....

i got 3 quotes and they ranged from £95k-£129k - percentage wise that was a heck of a difference in prices.... i took the middle of the range and it still did not sell...

Since being in the property business now for 11 years, i have realised that not all improvements actually add value to a property... the number one added-value is a 2 storey extension....

Making a property "lovely" (and i certainly dont say that with any degree of disparagment whatsoever) certainly gives it a "wow" factor, but i almost guarantee that the £50k you have spent will not be recoupable.....

As to value.... i think you can only go with your local agents... no one knows your local market more than them...

Myself.. i would always choose a small independent EA who has been in the business for a long time if there were one in your area... they have their reputation to lose if they over/under value significantly often.. and they cant afford to lose it.. EAs from Big chains (often owned by banks and franchises) come and go.......

Hi Clutton,

Thanks for your advice!

I realise that the monies we've spent will not be recoupable - although I would have thought adding an ensuite would have some monetary value? Previously there was no upstairs bathroom/loo at all but we have added a largish (10' x 7') ensuite (complete with bath) which is a godsend at night, I can tell you!

We are definitely going to go with a local agent, although one of the ones we've had round already believes it will be a London buyer possibly looking for a retirement/holiday home who will buy and he said they do a lot of advertising in the London area.

If prices have dropped here by 10%, how much would the addition of the works carried out balance this out by roughly would you think?

LL x

clutton_2

lily - i would not even begin to hazard a guess.. the papers talk about the Uk property market... in truth the uk has thousands of individual local property markets.. each small area has its own micro-market - some areas are still going up, some are remaining static and some going down.....

some folks are willing to put their post code here - others are not - this might help others help you to do more research as to the trends in your area.

good luck

Doozergirl

This is a bit hard. We dont' know where it is and you haven't even told us what you paid for it.

Your agent will be using comparables from across the area - as your potential buyers will be searching across an area. I would expect each of those agents to provide you of the details of houses which they deem comparable and have sold recently. Those houses will be of a similar square footage and really should be period houses if possible. If they don't do this, then I would not even consider their valuation - because if they can't show you, then how do they actually know!

Though a hand built kitchen and a Villeroy & Boch suite are desirable, they won't add as much money as you are likely to have spent. Even when you don't spend as much as you have, but have a really nicely finished property, you find that it is still hard to fetch much more than a property that isn't in such great condition. People have a habit of underestimating how much work needs doing in a house, even one that is perfectly liveable but a bit outdated. I do 'unique' houses and my comparables always have to be drawn from across the area but I also have to accept that despite being immaculate, people don't realise the value of the fact that it comes with no maintenance, and we will only get a small percentage more than even an identical house with a 15 year old kitchen and bathrooms. And I keep getting told that surveyors are being harsh at the moment.

If the agents can provide you with some comparably sized properties in the town/area and have sold some recently, then there valaution can be taken seriously. You then draw an average of the prices given to you by the agents with relevant, recent experience.

And you look at rightmove. Right across the whole town. Look at the room sizes and even if they aren't all brand new and mint inside, think that yours is worth the same. Some people will be asking too much. Get property bee and look at how long they have been on the market - if it's a long time, they're overpriced. The best comparables are those which are already under offer.

liberty_lily

Cheers guys!

Clutton - I quite understand - thanks for your good wishes!

Doozergirl - thanks for your comments and advice. I don't want to give my postcode or too much other info as a close neighbour is also selling his property due to downsizing and as I believe he might frequent these boards I didn't really want him to know we were planning to move. Suffice to say we are in Essex, quite close to the Suffolk border.

We paid just under £300,000 in November 2007. It is a 5 bed detached house of approximately 1500 square feet with ORP for 3 cars and gardens to all 4 sides. We have 2 reception rooms, kitchen and conservatory as well as 2 shower rooms and an ensuite bathroom - although as 3 of the bedrooms are downstairs these could alternatively be used as further reception rooms (as indeed we use them).

Our neighbour's house - a 1990's detached 3 bed bungalow of approx 750 square feet is currently being marketed at £240,000, although I think he is being a little optimistic going by what one of the EAs said.

Obviously at the price we paid we are close to being in the stamp duty threshold cut-off bracket and whilst we realise we are not going to recoup what the renovations have cost us we are hoping to achieve more than £250,000 - especially as the area we are having to relocate to is considerably more expensive!

Unfortunately as I said there are no other properties remotely like ours in the area - not for sale or otherwise - as it was commissioned by the original owner in the 1920's. It has all it's original solid oak windows, doors, floors etc and a 2 storey vaulted and beamed ceiling to the main reception room plus a very unique exterior.........so not your run of the mill house!

Thanks again for all your comments

LL x

mostlycheerful

“As we wish to sell quickly in order to be in a position to relocate asap”

A recent report suggested that since Jun 09 there’s been 760,000 sales and currently 1.1 million stuck sellers who can’t sell at any price so perhaps it might be worth considering simply renting somewhere near your parents in the interim while you sell your place. If you take your time over the sale then possibly you could recoup all the cost of renting rather than selling cheap in a hurry and therefore possibly losing a lot of the potential value.

And even if you’re willing to accept a low offer you nevertheless may not even be able sell cheap in the current market conditions. Even in a booming market sales traditionally often dry up over winter so you may well be looking at spring time next year as the first realistic chance of selling, and then only if sales pick up again, which they might not if the current credit crunch recession continues as bad as it is at the moment – or even gets a whole lot worse which it could do, for all sorts of reasons.

“We are not sure whether to take the estate agents' recommendations at face value…”
“…or whether we just take the EA's word for it”

Hopefully your agent is a decent sincere hard working type who will genuinely do the best they can for you. However, as EA’s are salespeople on commission and mostly only self interested and are notorious for lying all the time and often doing all sorts of dodgy scams to rip off and take full advantage of customers it might be appropriate to bear this in mind and therefore maybe take anything they say with a pinch of salt and only act on what they say if it can verified independently elsewhere.

Despite being smooth and charming and apparently professional, nevertheless a lot of salespeople actually tend, at least part of the time, to work on the principle of never give a sucker an even break and a fool and his money are quickly parted and such like. They’ve got all sorts of ways of pulling the wool over your eyes. Remember they do this all the time so they know all the wheezes. And do them all the time, automatically, as a matter of course. It's just simply how they do their business. And why not. They're only doing their work to make money and earn their livings so it's understandable if they maximise their earnings as best they can. They mostly regard clients as sheep to be herded and sent to slaughter, so, no, never believe a word they say and question everything they say. Always do due diligence, buyer beware caveat emptor and such like should perhaps be uppermost in your mind when doing important business. Otherwise you can get skinned and get taken for a right mug. Happens all the time, not just in property, it’s the way of the world in all sales and business.

Also remember that you’re the boss and never fall for their rubbish about them being the experts and that they know but you don’t. That’s just what they want to foist on you to try to control you. So always make sure that you control them and never allow them to control you. And always do your own independent research about everything, don’t just rely on what they say. If you do sufficient research yourself you may in fact find that some or even all of what they say is wide of the mark. Not necessarily, your agent may be fine or even very good, but it’s hard to tell whether that’s the case so you might as well do your own due diligence then you’ll know that you’ve done the best you can rather than just leaving it to chance and hoping for the best. And therefore running the risk of losing out unnecessarily whereas if you’d just done a bit more work yourself you might have done better - and sometimes a whole lot better.

“Realistically we know we won't get back the value of the work we've done”
“I realise that the monies we've spent will not be recoupable”

Not necessarily. You might be able to recoup what you’ve spent if you hold out for a decent sale price. If you reckon to spend the next year or two on the sale and don’t just sell it off cheap in a hurry then sooner or later, if you’re lucky and if you negotiate the right way, then you may be able to find a buyer who loves it and is prepared to pay full asking price. Maybe. Yes, of course, maybe not, but it might be worth trying. Unless you try you’ll never know.

“…he said they do a lot of advertising in the London area.”

Good. Perhaps monitor that and check that they really do put some effort into marketing in London. So what exactly do they mean about marketing in London seeing as marketing is generally on a website which is not location specific? What, adverts in London based newspapers? Or getting some London based agents to do a marketing push on it? Or what? I’d ask them for an explanation of that by email so that you therefore, hopefully, get a response in writing. And then you can check it and perhaps maybe also enhance it further yourself.

Hope this helps your thinking and planning. Good luck.

liberty_lily

Thank you Mostlycheerful

To be honest OH and I are not keen on the rental idea, although I do see that it could work for many people.

The more I think about it, the whole thing seems fraught with potential problems - we have an awful lot of antique furniture which we would not be prepared under any circumstances to leave behind so the house would have to be let out unfurnished. We would then obviously have to find an unfurnished property for ourselves to live in and one that could accomodate all our furniture would need to be pretty large..........and consequently expensive. Although we currently have no mortgage and are not intending to get one for our next house, we will be without a regular income for a while till our business is fully established - we are currently in the process of setting it up.

There is therefore the likelihood we would have to put much (if not all) our furniture into storage thus incurring further costs, although there is a chance we could store some of it at my parents' house.

Obviously the intention would be to utilise the rent from our current home to pay for this additional expenditure, but I don't believe there is much call for long term rental property in our area. A good proportion of the local residents are retired people or second home owners and whilst there are of course young families in the area most of these seem to go for the properties on newer estates so as a rental proposition, despite the renovations we have carried out I don't believe our house is an ideal candidate.

We would not be happy to leave the house empty whilst we moved over 150 miles away and also we have three cats who I guess would not be welcome in most rental properties.

I have done some further research into looking for similar properties for sale/sold in our area and the only one I could find of a comparable age/style is on the market for £325,000. We actually have the details for this from when we bought our own house. This, whilst dating from the same period has none of the unique internal/external period features of our own, although it is also detached and approximately 100 square feet larger. It also has a garden of a third of an acre compared to ours which is much smaller. However it is on the main road to the seafront which is a bus route, whereas ours is on a quiet road with little through traffic. This other property sold for £337,000 in December 2007 - one month after we bought ours for just under £300,000. From the 2007 details we still have it appears that the current owners have done nothing to the house in the last three years.

Regarding the estate agent who said they would market our house in the London area, he said they advertise in a London property paper, but as you say I would need to get confirmation of this.

Many thanks again for everyones' comments!

LL x

westlondonbuyer

In London, you often find big period houses chopped up into flats of all sorts of layouts, shapes and sizes, and in various degrees of repair. As direct comparisons are almost impossible, agents value them on price-per-square-foot, and do the same for outside space, with 10% either way for condition. It might be worth asking your agents to do price-per-square-foot comparisons if there are no similar properties near you. Yours may be worth a premium on top if you're lucky. Unfortunately you may also find its rarity may be its downfall - if neighbouring houses are grotty terraces, for example, even a Georgian rectory or Queen Anne dolls-house is going to struggle.

If you have a really unusual or particularly well-presented property, try contacting the property section of your local (or even national) newspaper and asking if they want to do a feature on it. Or see if there's an interiors mag that might be interested in taking photographs. It will cost you nothing except your time, and provide some additional marketing to a wider audience.