Trying to sell an Unmortgageable house

DVardysShadow

JH81 wrote: »

... I guess what I cant decide is should I cut my losses and get the money, or get the report, maybe spend £5k on plastering the cracks, taking down the garage, do something with the electrics - which would make it mortgageable and maybe raise the price to £135-£140. But thats a risk.

Get the survey. The survey is to help you decide what to do with the house. Take your time choosing a surveyor and don't choose on price alone. And brief the surveyor why you want the survey done.

Doozergirl

I'm not sure what value the survey provides. People have wanted to buy it, nobody has wanted to at the price it was agreed at. If it didn't sell at auction, what price was it bid to?

If you sell an unmortgageable house through an estate agent, you will always get people trying to buy that need a mortgage or don't understand the level of work that is needed. Hence they pull out. Auction is the only route for a house like that once several sales have failed. Indeed, people will not pay the amounts offered by Joe Public but then Joe Public can't buy the house! What you get is a guaranteed sale once you've set the reserve correctly.

You hide the cracks on a house which is clearly in need of work (especially if someone has recommended knocking it down!), a surveyor will immediately wonder why new work has been carried out and not finished. On a brick house, the re-pointing will show and a rendered house rings bells anyway!

If it is that bad, then is it on a big plot? Perhaps planning permission for a larger or more houses on the plot would increase the value?

kingstreet

I'd offer one of the former buyers a couple of hundred quid to buy a copy of their survey from them, purely for information purposes only. This should tell you exactly what you're up against and if it is worth you spending money to get the price up.

property.advert

Look at the TV. Half the country wants to buy somewhere for fifty quid and sell it for a million after spending tuppence ha'penny on it. This is where you are at with your property.

If you can spend 5k or 10k to sort it all out and market it with new paint, all jobs fixed, gardens landscaped and well presented, structural issues addressed with reports where necessary etc. then there will be no reason for people to fail to get mortgages and thus it will sell at the right price.

Or you can reduce the price and let someone else do the work and watch as they fix it up and make a profit. Up to you.

propertyman

Doozergirl wrote: »

If you sell an unmortgageable house through an estate agent, you will always get people trying to buy that need a mortgage or don't understand the level of work that is needed. Hence they pull out. Auction is the only route for a house like that once several sales have failed. Indeed, people will not pay the amounts offered by Joe Public but then Joe Public can't buy the house! What you get is a guaranteed sale once you've set the reserve correctly.

You hide the cracks on a house which is clearly in need of work (especially if someone has recommended knocking it down!), a surveyor will immediately wonder why new work has been carried out and not finished. On a brick house, the re-pointing will show and a rendered house rings bells anyway!

If it is that bad, then is it on a big plot? Perhaps planning permission for a larger or more houses on the plot would increase the value?

Very few houses are unmortgageable. It may be that the amount of works required may mean that it does not offer sufficient security at the agreed price.

If the condition is understood, then it is valued appropriately.

Unfortunately what the average estate agent is bad at doing is understanding those issues, price ans a function of condition, where works are not simply re-decs, and new K & B.

So your options are;
1: sell as the market will bear
2: have a chartered building surveyor inspect for structural and condition issues
3: Break down what needs doing and ask contractors to quote on the basis that you want to modernise/ or be honest and pay for a reports on drains electrics plumbing damp etc

atush

I was in this situation with my mothers house.

I fixed it up and it sold for more than it's worth before i did the work and the money I spent.

Get the survey done either yourself, or buy a copy of a previous one. Find out how much it will cost to do the work. Do as much of the small stuff as you can (ie ripping out) for the bulider to keep their costs down on labour.

I assume you have sold off the contents?

Strapped

The problem is that buyers wildly overestimate how much "work" will cost. And mortgage companies have to do so to protect their interest. I'd put the effort in to find out exactly what's wrong with the place (what was the retention on the potential buyer's mortgage for, for example) and put it right myself.

poppysarah

JH81 wrote: »

We then went down the auction route but couldn’t sell, accepted another offer at 145k but they then reduced this offer by £10k then £20k after a survey - they too were offered a mortgage but on a retention (not sure how much)

What sort of auction allows this?

Did they lose their deposit?

propertyman

poppysarah wrote: »

What sort of auction allows this?

Did they lose their deposit?

They couldn't sell at auction, and then found another offer.

poppysarah

propertyman wrote: »

They couldn't sell at auction, and then found another offer.

Doh! thanks