House to sell: renovate or sell as-is?

houseq

My parents have recently ended their marriage and intend on divorcing soon. They have joint debt of roughly £40,000 and a remaining balance of £70,000 on their mortgage, they need to clear this debt prior to divorcing. At present my father is living in the house and my mother and siblings are living in my house, this is not ideal and a situation we do not want to be in for too long.

The house that they own is a 3 bedroom semi-detached house, last year an identical house on the other-side of their neighbours house sold for £140,000. That house was first put on the market 18 months prior to the sale, the list price was £142,000.

The house that sold for £140,000 was in fantastic condition, comparatively my parents house is in sub-par condition, although it has a relatively new conservatory (6 years old) and a new and in good condition kitchen (4 years old), the rest of the house needs work. The boiler needs replacing, a new bathroom is required as the current condition is poor and ideally the house needs redecorating throughout -- new carpets, painting, general tidying.

The total value of my parents debts is roughly £110,000, including the costs of selling and the amount that my parents need to walk away with from the sale we're looking at needing to sell for 120,000 at the very least.

From what I have discussed with my parents we believe the options are as follows:

Renovate

I invest £5,000 in bringing the property up to a livable condition, this would include a new boiler, a new bathroom and redecorating (walls, carpet) throughout, I recoup my money at the time of sale, which would mean we need to sell the house for £125,000.

Pros: I expect that a house that can be moved into right away would sell much faster than a house that needs work, it would make the house family friendly and as we only need to sell for £125,000 (vs. an expected selling price of £140,000) we could price very competitively and be in a position where we can adjust the price for any prospective buyer, instead of needing to make the asking price.

Cons: I would now have a financial interest in the house, meaning if the house doesn't manage to sell or sells for only £120,000 I would have lost money. This isn't the end of the world -- I only intend on investing money I can afford to lose -- however it's not ideal.

As-is

The house is tidied and made presentable (maybe a lick of paint here and there) but no more than a few hundred pounds is spent on this. The house is listed as is, with a new boiler and bathroom being needed acknowledged and when visiting the house buyers will be acutely aware that work needs to be done before they can move in.

Pros: I do not stand to lose money this way, no work is required and if a buyer is looking for a house they can renovate themselves they would be in a position to purchase my parents house (at a lower price) and renovate themselves, to their liking.

Cons: A house in poor condition that needs work will exclude some buyers, a first time buyer will not want to invest money (they probably don't have) in making a house nice, buyers will also be put off when viewing by the poor state of the bathroom.

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The final consideration is that at present (and until the house sale) my family is dependent on me for my financial and housing support, although I could possibly manage this for an extended period of time it's not ideal for me and the longer the house remains unsold the more money I lose / the more my life is effected.

The ideal situation is one in which we put the house on the market and it sells within 3 months (sale completed within 6 months) for at least £120,000 (or £125,000 if renovated) although the higher the price the better. The house needs to sold before 2015. We plan to put the house up for sale at the end of September / start of October.

Does anyone have any advice regarding what we should or shouldn't do to achieve the goals listed? Any advice/thoughts is/are greatly appreciated, thank you in advance! If any more information is needed to better advise please let me know.

chickaroonee

I'd get some local estate agents round to give you their view on your local market, sometimes it's just not worth doing the renovations yourself. They should be able to advise.

LEJC

sometimes renovations can be costly and time consuming...and whilst they will make the property look more apealing to a certain market once you add the factor of cost involved wont give you any greater return...

I inherited a property 18 months ago and whad it valued in its raw state for "i wonder how much its worth " factor...at the time i was told it would appeal to the builders and keen people who would do up to their taste and given a figure of £x.....

It was always my intention to renovate the property and rent out...18 months on and the property is renovated and ready...we have spent £40k plus a little on work and hey ho its been valued at near enough the original valuation plus what we have spent on it...the only difference now is it probably would suit someone who wants to move straight in rather than a builder or keen enthusiast..

In my mind you are pitching the property at 2 different target markets and in doing it up doesnt guarantee you a return above you outlay once its sold....actually if its the cash you need I would suggest you go for the quick sale.

Ivana_Tinkle

£5k sounds very optimistic for a new boiler, new bathroom, new carpets and complete redecoration. Are you planning on doing most/all of the work yourself? If so, do you have much experience of this kind of thing and the spare time to do it all?

I think you need to be aware that you could end up spending a lot more than £5k and/or you could be spending all your evenings and weekends on this for a good few months. It doesn't sound to me like you'd get enough extra for the house to merit your investment of money and time. I'd be inclined to just get it sold.

I_have_spoken

Yep, also factor in the £125,000 stamp duty threshold. Between £125k and £130ish is a 'dead zone' for sale prices, so putting an extra £1 in may get you £0 back.

IMHO trying to do a cheap bathroom will look it, and buyers may be thinking they're paying for something they'll rip it. I'd market it as an honest 'project' for buyers who want to make their own choices for a refit.

a first time buyer will not want to invest money (they probably don't have)

With a 3-bed semi your target market maybe couples looking to move on from a starter home/flat into a family home and who have the enthusiasm to take on a 'project'

AnthonySoy

According to me to selling the house AS IS will be the best option for you and your family.

ognum

I would at least try to sell as is with an asking price of £130k in the knowledge you will be beaten down below stamp duty of 125k.

the time and effort needed to make this house better and then just take it above stamp duty threshold makes it not work the effort. This will allow you to get it on the market now in the hope that you can all get on with your lives.

good luck!