FTB: How much % under to offer?

RelievedSheff

JenniferMcConnell said:

The particulars...

I can see why you like it. I was expecting much worse from your description. That has the potential to be a very nice house with some work and a bit of reconfigeration of the rooms.

eddddy

In your position, I'd just offer whatever you're prepared to pay.

In the current market conditions, the EA will work very hard to get an offer accepted. That will include

• putting a lot of pressure on the seller to accept your offer
• putting a lot of pressure on you to increase your offer
• working hard to get both buyer and seller to find a compromise price

(FWIW, I came across the guy that runs that EA many years ago. He was very much not the sort of person that would just pass an offer on to a seller, and sit back. He was the sort of person who would graft and negotiate hard to find a way of getting a deal. So be prepared for a tough negotiation!)

UnderOffer

RelievedSheff said:

JenniferMcConnell said:

The particulars...

I can see why you like it. I was expecting much worse from your description. That has the potential to be a very nice house with some work and a bit of reconfigeration of the rooms.

I thought that too, it’s a lovely house and has so much potential. Good luck Jennifer.

JenniferMcConnell

Thanks everyone. So glad everyone can see what I see, and the potential it has to be a forever home. I never thought I’d be in this position and always be a renter, but owing to some unexpected inheritance last year from my mum passing away, and some savings, I’m in this really fortunate position. I’m really trying not to get my hopes up. 

I’ll let everyone know how I get on! 

Mutton_Geoff

I agree, a nice looking home. As a FTB with limited budget, I would concentrate on sorting the damp issues. Looks like leaking gutters, lack of ventilation and damp course breached by the paving slabs over the front garden (lift the ones adjacent to the house, dig out and fill with gravel at least 6" below DPC.

Do nothing else except decorate until such time as you can afford to renovate it properly since to "modernise" it will need structural work for large kitchen diner, rear extension, ensuite bathrooms etc. Budget £100k for that later.

The estate looks unusual, I would download the deeds and check for unusual covenants and ask the agent what they know. Do you work regular hours and commute by car? The way in/out looks like it could be a bunfight in rush hour.

JenniferMcConnell

Thanks Mutton_Geoff, yes I agree the only work we do now is just to get it move-in-able. Knocking down walls can come at a much later date. 

We have a second viewing on Saturday with a builder who will give us a good estimate.

I think it is worth me sounding out the EA sooner rather than later to find out more about the seller’s ability to negotiate. 

I’ll look into the land registry and find out as much as I can! 

edward2113

We were in a bit of similar situation pre-COVID, I have actually written about it in other threads. We have made up our views after an EXTREMELY thorough research, so I will share it with you in order to save you some 2+ months of speaking to architects, builders, reading renovation forums, etc.

FTB, agreed on a price before lockdown, very similar to your price. The house had some issues with condensation and needed a bit of modernisation, but nothing like what you are saying your house needs. We were planning on buying the house and immediately doing a renovation of the kitchen and dining room, as they were very old and not functional. 
The idea was to tear down 2 walls and put in a new kitchen and some other bits and bobs. Builders said that this alone would cost upwards of 100k, and solving the condensation issue etc will come on top. We were absolutely taken aback with the price as we thought something like this wound cost 3 times less than that.
In the end after lots of thinking, we decided to pull out of the purchase, as 1) if you buy a house now, you have the possibility of prices going down = negative equity, so in the next 2 years you need to hold on to any cash you have in case you need to pay this negative equity; 2) for us this would have meant living in a damp and not functional house in the next 2 years, possibly more than that.
So what I am saying is, from your description it sounds like such a renovation would cost you upwards of 150k, and you need to think really seriously about whether it's financially responsible to give so much money right before possibly turbulent economic times. If you have lots of cash (e.g. 300k) and you have a cushion to fall back on, yes it would make sense. If however you will spend all your cash for the renovation, you will have nothing to fall back on if one of you loses their job/ house falls into negative equity (both very real possibilities for everyone).

Mutton_Geoff

edward2113 said:

Builders said that this alone would cost upwards of 100k, and solving the condensation issue etc will come on top. We were absolutely taken aback with the price

How many quotes did you get? £100k buys you a lot of work in most parts of the country. I'd say that was a reasonable budget for major renovation of a house like the OP wants to buy, not just removing a couple of walls.

edward2113

Mutton_Geoff said:

edward2113 said:

Builders said that this alone would cost upwards of 100k, and solving the condensation issue etc will come on top. We were absolutely taken aback with the price

How many quotes did you get? £100k buys you a lot of work in most parts of the country. I'd say that was a reasonable budget for major renovation of a house like the OP wants to buy, not just removing a couple of walls.

Not in the SE unfortunately, and it sounds to me like OP is somewhere in that area judging by the price of the house. After reading through lots of renovation forums and speaking to quite a lot of people who have renovated their homes in the area, turns out renovations for 100-150k seem to be the norm here. I got a few quotes, the most comprehensive one was from a family friend and was still above 100k.

In any case, this is besides the point. It might turn out that 100k for renovations will be enough for them, but it still might be too much of a financial burden given the economy now if they don't have a lot of cash. And the perspective of riding through a crisis in a damp house with a toddler... not great.

Crashy_Time

edward2113 said:

We were in a bit of similar situation pre-COVID, I have actually written about it in other threads. We have made up our views after an EXTREMELY thorough research, so I will share it with you in order to save you some 2+ months of speaking to architects, builders, reading renovation forums, etc.

FTB, agreed on a price before lockdown, very similar to your price. The house had some issues with condensation and needed a bit of modernisation, but nothing like what you are saying your house needs. We were planning on buying the house and immediately doing a renovation of the kitchen and dining room, as they were very old and not functional. 
The idea was to tear down 2 walls and put in a new kitchen and some other bits and bobs. Builders said that this alone would cost upwards of 100k, and solving the condensation issue etc will come on top. We were absolutely taken aback with the price as we thought something like this wound cost 3 times less than that.
In the end after lots of thinking, we decided to pull out of the purchase, as 1) if you buy a house now, you have the possibility of prices going down = negative equity, so in the next 2 years you need to hold on to any cash you have in case you need to pay this negative equity; 2) for us this would have meant living in a damp and not functional house in the next 2 years, possibly more than that.
So what I am saying is, from your description it sounds like such a renovation would cost you upwards of 150k, and you need to think really seriously about whether it's financially responsible to give so much money right before possibly turbulent economic times. If you have lots of cash (e.g. 300k) and you have a cushion to fall back on, yes it would make sense. If however you will spend all your cash for the renovation, you will have nothing to fall back on if one of you loses their job/ house falls into negative equity (both very real possibilities for everyone).

Good advice, rushing into this with an inheritance is a really bad idea IMO.