Difficult house to value

GDB2222

We are looking at a house to purchase that is in quite a serious state. It has subsidence, plus it has been neglected for many years and needs an awful lot of remedial work. I have seen a structural engineer's report, prepared by the seller, that says part of the house has been underpinned, and we would need to underpin the rest.

On the other hand, the house is fairly cheap, and that's compared to other houses that, although superficially better, would probably still need an awful lot of work.

To formulate a sensible offer, I would need to get a structural engineer to do a proper estimate of the work required, and that's likely to cost £1-2k. Plus, we may need to dig trrial pits to expose the foundations (with the seller's agreement).

That seems like an awful lot of expenditure without even having agreed a price, and without any commitment from the seller not to sell to someone else. There is a buyer, who has been in the process of buying for months, but that seems to have stalled. 

So, it's a sort of chicken and egg situation. Any ideas?

mi-key

Not really much you can do as its always a risk. You need to decide if the cost of the reports and investigations is worth the gamble. It could throw up all sorts of problems that mean it's not worth doing at all, or could show it would be a relatively easy job.

Is the house really cheap enough to make it worthwhile doing the work? would you get that money back if you came to sell it in the future? 

ReadingTim

What makes you think it isn't already sensibly valued, with the price taking into account the cost of the work that needs doing?  Don't you think the vendor isn't aware of the state of the place?!?  

You ought to be able to get some ballpark figures as to likely cost pretty easily, which should be enough to allow you to decide if you're willing or able to proceed, but if you're trying to get a "proper estimate" down to the last pound, shilling and pence, then I'm tempted to repeat the old phrase - "if you have to ask how much it costs, then you can't afford it...."  Suggest therefore this isn't the property for you.  

AskAsk

when i sold my house, the property was of interest to developers as it needed complete refurbishment and there was potential to extend it and convert it to flats.  the first one offered the asking price, then after he had the structural engineer report, he dropped the price to take into account what came out of the report.  i didn't accept the reduced offer and so the property was put back on the market.

the second buyer, also a property developer, offered a lot less than the asking price, but still a lot more than the first buyer's reduced price, so i accepted his offer.  the sale completed but both developers had spent money on the structural engineer and architects as they were planning to convert the house into flats.

so if you want a cheap property to develop, you need to be prepared to pay for the structural engineer report.

lookstraightahead

The house will have been valued with all that in mind.

theoretica

GDB2222 said:

 I have seen a structural engineer's report, prepared by the seller, that says part of the house has been underpinned, and we would need to underpin the rest.

To formulate a sensible offer, I would need to get a structural engineer to do a proper estimate of the work required, and that's likely to cost £1-2k. Plus, we may need to dig trrial pits to expose the foundations (with the seller's agreement).

You have already seen a structural engineer's report - can you use that for initial discussions with the seller on price at worst case/best case scenarios? 

MikeJXE

I would want to know what is causing the subsidence, is it the location and other properties are similar or is it the ground it sits on ? 

I have worked in the building trade for many years and have seen the slow progress of underpinning and 1k - 2k seems incredibly cheap depending how much the rest actually is, plus is the existing underpinning satisfactory ? 

Any ideas ?

Yes unless you have a shed load of money walk away, there's not much worse than subsidence 

Doozergirl

You need to underpin the whole
house? Wow.   

Are you jumping from the frying pan into the fire?  This is where you remember those EA comments about £3k a square metre! 😉 

GDB2222

theoretica said:

GDB2222 said:

 I have seen a structural engineer's report, prepared by the seller, that says part of the house has been underpinned, and we would need to underpin the rest.

To formulate a sensible offer, I would need to get a structural engineer to do a proper estimate of the work required, and that's likely to cost £1-2k. Plus, we may need to dig trrial pits to expose the foundations (with the seller's agreement).

You have already seen a structural engineer's report - can you use that for initial discussions with the seller on price at worst case/best case scenarios? 

No. It’s very vague.

GDB2222

Doozergirl said:

You need to underpin the whole
house? Wow.   

Are you jumping from the frying pan into the fire?  This is where you remember those EA comments about £3k a square metre! 😉 

It is £3k /sq m cheaper than a house two doors up the road that presents itself much better. Both need work to bring them up to scratch.

For our purposes, for both houses, we would need to knock the kitchen and dining room into one. We would also want to knock the upstairs around in both houses, to create an en suite bathroom.

So, we would be taking much of the house back to the brickwork. What I’m not sure about is how much more it costs to underpin it at the same time. 

We have just been to see a house that is being renovated. It is smaller, much more expensive, and we don’t like what is being done to it. 

ThisIsWeird

GDB, as asked, why is it subsiding? If it's down to local conditions, then almost certainly local builders will have done this a few times - worth asking?