House descibed as worthless is this true?

KarenT1978

Hello,

My mother has sadly passed away recently and has left her house to myself. It is an ex council house which at the time my Mum and Dad bought it, it was explained to them that due to the house being a reinforced concrete frame house that it would be unlikely that any normal lender would give a mortgage towards it. We are fully aware of this going forward and realise it will greatly effect the value of the house for resale as it could only really be sold on to someone who was a cash buyer. At the moment visually Mums house is in good condition and is a semi detached 3 bedroom house with a lovely big front and back garden.

We are still in the early stages of processing mums affairs and have not got round to the house yet. Coincidentally there was an article in a local newspaper yesterday that stated a house of similar construction elsewhere in Scotland was being considered worthless.

http://www.dailyrecord.co.uk/authors/the-judge/furious-couple-trapped-defective-house-10461313

This came as somewhat of a surprise to us as we checked online and a three bedroom terraced house in the same street as my mums constructed identically to hers sold in 2015 for £59000.

So is this newspaper sensationalism to say the house is worthless or will it have some value. Also can anyone advise on the best way forward in trying to sell a house which will only be of interest to cash buyers, assuming it isn't worthless. Are there firms who specialise in this sector of the housing market.

Thanks in advance for all help received.

K

Pixie5740

The article is sensationalist. The survey was a valuation survey carried out by a mortgage lender (HSBC). Since lenders don't grant mortgages for properties of that type of construction then for the purpose of a mortgage valuation the value is zero. That doesn't mean that the property won't have some value to a cash buyer though.

I think these types of properties are usually just put up for auction or advertised via an estate agent marketed as being for cash buyers only.

getmore4less

In America property in some areas had negative values because of condition placed on new owners to refurbish them to certain standards..


The issue is that if the physical house is worthless the cost of removal could exceed the value of the land.

As long as the place won't fall down lowish maintenance and has reasonable letting potential then 10 time annual rent is probably a reasonable low ball value.

mysterymurdoch

Admitting you read the daily record is something to think carefully about!

Just get an estate agent in to do their free marketing chat and valuation and see what they say. There are plenty cash buyers out there.

Hoploz

Definitely speak to some local estate agents. They will have come across this before in the local market and will know what sort of price is appropriate. It will sell, but it may take longer and obvs will be worth less than a standard house due to the restricted market. In your situation you aren't in a mad rush presumably so I would market with an EA initially then if nothing is happening then the auction route would be next if necessary. But there are cash buyers about.

00ec25

when you (ie your mother's executor) complete the probate declaration and put a value on the house it will be checked by HMRC and i very much doubt they would accept a nil value when you yourself say the data that HMRC would use includes the fact a nearby property sold 2 years ago for a lot more than zero

if you want to make a probate declaration for a below "market" value then you need to have a LOT of evidence to support that. A sensationalist article from Scotland will not cut it. "Market" value in your case may well be land value less costs of demolition, but I doubt that final figure is zero and getting to such a number would almost certainly best be left to a professional valuer since it may need to be defended to HMRC

Fireflyaway

Sorry to hear about your mum. Could you consider renting it as an extra income? I'm not an expert, I know some houses are harder to get a mortgage for but usually just require higher deposit to get round it unless its on the side of a cliff!
Ask a few local agents and then form an average conclusion.

G_M

Get it valued properly for Probate.

That will answer your question.

You can't sell it anyway till Probate is granted.

(sorry - that relates to England. Is the property in Sotland?)

Cakeguts

Even if the building isn't worth anything the plot will be.

00ec25

Cakeguts wrote: »

Even if the building isn't worth anything the plot will be.

indeed, but as mentioned above, hypothetically a plot on some run down council estate somewhere with little prospect of the land being used for high density in-fill development the building could just possibility cost more to demolish than the land is worth - somewhat unrealistic I think however.

flashg67

Seen this type of house often on Homes under the hammer. If there's a rental potential in the area, you still should be able to find a cash buyer to take it on, but maybe via an auction, rather than a high street agent