How to price the hassle part of renovations

Saxy1970

I just wondered what you guys thought about how to calculate the price of the hassle involved in doing work to a house. Is there a kind of rule of thumb of costs plus X percent. So for example, if I knew for certain the work to bring it up to scratch is going to cost 50k (and I know it's impossible to know for sure when you start a job the price but just pretend it was exact) would you say an extra 25 k is a 'fair' price to knock off the sale price for the hassle involved? Or what?

The house I've made an offer on, if done up would be worth 250k. After a disappointing survey today, there's an estimated 50k of work to make it nice, mortgageable and habitable that was not obvious or expected so I need to renegotiate price. So 250k minus 50k repairs = 200 less what exactly for the hassle factor when trying to renegotiate with my vender. What would be a fair price for both parties here? Am I living in cloud cuckoo land to think 175k is fair in the circumstances?

I would be looking for somewhere else as I don't really want the hassle but this is a rare location with benefits and houses likes this one are rare. I am prepared to walk away though. I don't want to be a mug and paying ott. The market where I am is very buoyant and rising.

The type of work we are talking about is sorting quite extensive damp and rot, replastering, rewiring, new outside rendering, some replacement floorboards and joists and damp proofing and bay Windows sorted. 3 bed semi

Incidentally the surveyor said this house was unmortgageable in its current state so that should help me as I am a cash buyer and not sure how much more that would be worth off.

I know I can try with any offer I like But I don't want to come back too low with an offer tHat offends so they tell me to get lost and aren't interested in further negotiation with me. I want it to be realistic and souding fair first time

anselld

What price did you agree prior to survey?

Clearly you must have seen that is needed doing up when the original offer was agreed based on what you saw.

So there is no price for "hassle factor". You knew it when you viewed. Plus there are plenty of "Homes under the hammer" addicts out there looking for a project.

Even a £50k renegotiation is cloud cuckoo land. The only things you can reasonably renegotiate after survey are any surprises that were not apparent when the original viewing/ offer negotiation took place. To be honest it is difficult to see how even a complete refurb on a 3bed semi would cost £50k.

phill99

There isn't a price (or compensation which is effectively what you are seeking) for 'hassle'. If you lived in a house and needed damp etc works undertaken, you would just have to putup with the 'hassle'.

And anselld is right a 20% drop in price is in cloud cuckoo land.

Who has estimated that there is £50k worth of renovations?

Bear in mind if the kitchen, bathroom and decor of the house is in need of renewal, this will already be reflected in the asking price.

What is the house actually being marketed for?

moneyistooshorttomention

With what I have spent to date on my house (a 2 bedroom one) and the rest of the money it needs to get it finished (when I can afford it) I can easily believe £50,000 for a 3-bedroomer:mad:.

But the fact is that a high proportion of home-owners neglect their houses (to a greater or lesser extent) for whatever reason. Be it they cant afford it/cant be bothered/etc - whatever ....

Therefore - because most of the "neglecters" will know (in their own minds) that that is what they have done BUT they also know there are one heck of a lot of other "neglecters" out there = they don't make any allowance for hassle (ie because they know so many other people have also neglected their houses to one extent or another).

Yep...I can quite see where you are coming from...but I agree that you have no chance of being compensated for the hassle factor.

Doozergirl

The hassle factor is whatever you want it to be. It's always down to an individual.

A genuinely unmortgageable home should cost less than full value minus repairs simply because the market is reduced.

Try your £175k and see what happens. They can only say no and hopefully counter offer.

I'd be interested to hear the answers to some of the questions asked - marketing price and accepted offer currently. That will indicate how much further you're likely to be able to go.

£50k is quite a bit for a 3 bed semi (albeit a budget that won't trip you over later).

alchemist.1

You are living in cloud cuckoo land if you have offered 250k and now want to reduce it to 175k after the survey. The hassle factor was apparent before you made an offer along with majority of the work required.

Doozergirl

alchemist.1 wrote: »

You are living in cloud cuckoo land if you have offered 250k and now want to reduce it to 175k after the survey. The hassle factor was apparent before you made an offer along with majority of the work required.

I can't see where it says the offer was £250k?

alchemist.1

Doozergirl wrote: »

I can't see where it says the offer was £250k?

Oops my mistake ignore me.

davidmcn

Saxy1970 wrote: »

What would be a fair price for both parties here?

Surely it would be the open market valuation which your surveyor has given you? Though you haven't told us what that is.

chappers

Indeed £50k for a renovation of a 3 bed semi is easily feasible, but an extra £50k as unearthed by the surveyor for works that were not visually apparent on viewing , seems less likely.
What has the surveyor unearthed here ?
If I were thinking of spending £50k on a 3 bed semi renovation, I would expect that a fair bit of the works would be visually obvious.

As Doozergirl says, how close to the finished market value was your original offer, as for example if your original offer is already £50k below that, in a buoyant and rising market, you don't really have much room to negotiate down.

In answer to the OPs original question; It's not really relevant what the hassle factor is to you, its how the vendor perceives those works may affect their ability to sell.
My point of view as a developer, who may have intended to strip the place back to bare brick anyway, will be completely different to someone who thought they were buying a house to move straight in to, and the extra costs involved in resolving those problems will therefore be different.

Saxy1970

Thanks everyone for your thoughts.

Clearly I must have seen? Well no, that's the point. While it was clear the decor was tired and it needed a new kitchen and bathroom at some point for looks, (and my original offer was based on this and this alone) these problems in the survey were not obvious. Such as the rotten floorboards, joists etc etc. the floors and roof are crumbling. This work is estimated to be at least 35k plus vat. My offer was based on the place being tired, not at the risk of collapse. If it helps people see it's not OTT I could post a full breakdown of what needs urgently done. These were all a very disappointing surprise.

Theres a lot of stuff to do so actually this is not a crazy price, it could well be more than this. 50k is at the low end to redo a 3 bed semi when we're talking serious damp and rot

The surveyor said its worth nil as a mortgageable property and told me what a developer would pay for it cash - he said 170k would be at the top end. I doubt the vendor would accept this though it's not mortgageable and nobody would offer significantly more with this amount of work and the risk of more work when unseen horrors surface.

When I was asking about the hassle factor, I know people love renovation jobs, but why would I be paying exactly the same amount as somewhere all done up when calculating costs? The place would be unliveable In for a good few weeks and once one has dry rot, that's a red flag problem when trying to sell, even when treated as it never goes completely

My original offer was 220k based on new kitchen and bathroom and tired decor etc.and the obvious problems. The 50k I quoted does not cover these surprise survey things which are ON TOP of the 50k.