Inflated valuation, property needs work - what to offer?

Mrsc01234

Hi all

We finally found a house we like that has enough rooms for us and four kids. The HR (Scotland) values it's at 270k but acknowledges that the valuation is based on an unusual market situation. It's advertised as a 7 bed (2 are tiny rooms, passable as a study) and on for offers over 250k. It's currently advertised as *could* make a great family home, but it's two flats, with no connecting stairs. 4 rooms upstairs, and a kitchen plus bathroom upstairs - one would need to be sacrificed to make a staircase though. Upstairs is pretty well done out and was an Airbnb or similar. Downstairs is pretty neglected, elderly lady lived there until she passed away in 2014. It has storage heaters, no central heating but a very old oil tank and very old range. Has damp in a number of places, saw active woodworm so needs remedial work. There are quite a few other issues, rewiring I think. 

So, it's a beautiful old house, gorgeous location but needs work. I think even 250k is steep for what it is and what it needs. Modern 5 bed houses 2-3 houses away went for 220k & 240k in the last year and they didn't need much work at all. One was on at 295k but went for 240 in the end.

I'm not entirely sure how to proceed. As I calculate cost of repairs and time etc my genuine offer price gets far lower than the offers over 250k that they're asking for.

Does anyone have any advice in this situation?

I'm planning on noting interest and then making a low offer but detailing all of the work and actual costs required to make it the family home they're saying it is. Would welcome suggestions as an new to negotiating before offers bracket based on work a place needs. Thanks very much.

user1977

I know you said a couple of the bedrooms might not be really bedrooms, but bear in mind that some mortgage lenders are difficult about properties with "too many" bedrooms, so you might want to check out how acceptable it's going to be in principle, no matter what the value comes out as.

billy2shots

Mrsc01234 said:

Hi all

We finally found a house we like that has enough rooms for us and four kids.  

. Modern 5 bed houses 2-3 houses away went for 220k & 240k in the last year and they didn't need much work at all. One was on at 295k but went for 240 in the end.

I'm not entirely sure how to proceed. As I calculate cost of repairs and time etc my genuine offer price gets far lower than the offers over 250k that they're asking for.

Does anyone have any advice in this situation?

I'm planning on noting interest and then making a low offer but detailing all of the work and actual costs required to make it the family home they're saying it is. Would welcome suggestions as an new to negotiating before offers bracket based on work a place needs. Thanks very much.

Don't detail all the work needed, you are wasting your time and probably  upset the vendor and EA.


You 'finally found a house' . Could your expectations be to high and this house actually valued correctly?

The question has to be asked, why didn't you buy one of those modern 5 bedroom houses that didn't need much work, that sold last year. You say 'finally' but how long have you been looking?
Maybe wait for another if those modern 5 beds to come up for sale 



Or...........

Stop looking at the past , forget what sold when. 
Do you want this house, can you afford it and make the changes you require. 

Set yourself a limit, offer as low as you dare and keep your fingers crossed. 

eddddy

Mrsc01234 said:

I'm planning on noting interest and then making a low offer but detailing all of the work and actual costs required to make it the family home they're saying it is. 

Detailing the work that needs doing and the costs usually doesn't help getting an offer accepted. In fact, it can sometimes be a bad idea.

It can result in petty arguments about the things on your list, and maybe cause offence. For example:

"You say a new boiler costs £5k, you can easily get one for £2.5k"
"There's nothing wrong with the colour of the bathroom suite - I chose it that colour for my mother"
"My father built those cupboards that you want to rip out. He was a skilled joiner and they are top quality."


And your list is unlikely to influence them anyway - they'll just look at the money you're offering. 

I would stick with a more general statement, like my best offer is £x, taking into the improvements that I want to make, and my budget.

MovingForwards

Are you a cash buyer?
Small fact of the property being 2 flats, that you want to convert into a home, means not all lenders will touch it.

comeandgo

I think you proceed by asking your solicitor what they think regarding value.  You don’t need to put explanation as to why you have offered what you have as it is the sellers solicitor who deals with them and they really don’t give a fig.

Mrsc01234

Thank you all. Will definitely stick to an offer without lots of detail about improvements! :-)

"Set yourself a limit, offer as low as you dare and keep your fingers crossed." - think that's the best and simplest course of action - thank you! 

Solicitor getting back to us in the morning and will just leave it in their hands to make the offer. 

user1977

MovingForwards said:

Are you a cash buyer?
Small fact of the property being 2 flats, that you want to convert into a home, means not all lenders will touch it.

Sorry, I missed that - yes, that's going to be a no-no for mainstream mortgage lenders.

Mrsc01234

It's a single deed property, but is two flats with an external stairs to the upper flat. We're not going with a mainstream lender, but will speak to broker tomorrow too., thanks!