How to value?

hannah9000

A property, owner passed away, previously valued at £350k and sold in November (unsure of amount it sold for) had a pipe burst, and is now undergoing renovations after insurance claim. Previous buyers pulled out as they had sold their property and couldn’t wait for the repair works to complete. 

We’re interested in buying this property in it’s current state, current state: pipe is fixed however, no wallpaper, no doors, no flooring, no ceiling, no heating system (was only electric storage heaters anyway) - bathroom and kitchen are fine bar the lack of ceiling. 

My question is, very broadly, how much has the property devalued due to the damage? I will attempt to include a picture 😬

diystarter7

Hi

You could make a silly offer adn test the waters as we do.

Get building estimates, compare repaired property with like for like and decide.

As you kow those doing the work themselves can afford to pay more like builders and sell on

It depnds how desirable the location is etc

Persoanlly a sill offer from me with a idea re repairs costs and refurb

Thnaks

markin

They would be silly to sell in the current state, Offer 250K

mi-key

hannah9000 said:

A property, owner passed away, previously valued at £350k and sold in November (unsure of amount it sold for) had a pipe burst, and is now undergoing renovations after insurance claim. Previous buyers pulled out as they had sold their property and couldn’t wait for the repair works to complete. 

We’re interested in buying this property in it’s current state, current state: pipe is fixed however, no wallpaper, no doors, no flooring, no ceiling, no heating system (was only electric storage heaters anyway) - bathroom and kitchen are fine bar the lack of ceiling. 

My question is, very broadly, how much has the property devalued due to the damage? I will attempt to include a picture 😬

Do you have cash to fund the entire purchase as a mortgage lender may not lend on that as its not habitable.

If the insurance company are paying for the work, they would be better off just waiting until it is finished then selling for £350K again surely ?  

hannah9000

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

mi-key

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

hannah9000

mi-key said:

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

Thank you, my husband is a plumber, dad is electrician and between them have lots of very helpful builder mates so we’d do the works ourselves. 

The ceilings are still up in the bedrooms, the kitchen and bathroom. It’s just the lounge/hall that is bare, we’d like to re-wire so are hoping if they stick some plasterboard up it will be deemed habitable 😬 is that naive thinking?? 

mi-key

hannah9000 said:

mi-key said:

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

Thank you, my husband is a plumber, dad is electrician and between them have lots of very helpful builder mates so we’d do the works ourselves. 

The ceilings are still up in the bedrooms, the kitchen and bathroom. It’s just the lounge/hall that is bare, we’d like to re-wire so are hoping if they stick some plasterboard up it will be deemed habitable 😬 is that naive thinking?? 

That will be handy then. It doesn't sound like its a huge amount of expensive work needs doing

The mortgage lenders surveyor / valuer will look all around the house to see what they think its worth in its current state. How big is your deposit for it? This can make a big difference as if they value at £200K but you only need to borrow £100K from them then it makes it a lot easier as they know they aren't taking much of a risk if you did default.

Its definitely a possibility, but does rely on a lot of what ifs and what other people are doing 

Normally properties like this are only bought by developers or builders who can get them for cash so don't need to worry about mortgage companies or surveyors etc... and can do a quick flip for profit.

I'd have a chat with the owner first and tell her what price you are thinking. If she wants £320K and the insurance won't pay her directly then its all a moot point anyway. If she seems happy with £250K then get started with a mortgage lender and see what they say and go from there

MikeJXE

hannah9000 said:

mi-key said:

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

Thank you, my husband is a plumber, dad is electrician and between them have lots of very helpful builder mates so we’d do the works ourselves. 

The ceilings are still up in the bedrooms, the kitchen and bathroom. It’s just the lounge/hall that is bare, we’d like to re-wire so are hoping if they stick some plasterboard up it will be deemed habitable 😬 is that naive thinking?? 

If that's the case they would have a much better idea on costs, they have first hand look of the situation and no matter how helpful one can be on a forum that doesn't come close to actually viewing.

You only need to cost material, once you have a figure for that add the estimated labour costs plus some more then you have a price to offer which probably can't be beat 

hannah9000

MikeJXE said:

hannah9000 said:

mi-key said:

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

Thank you, my husband is a plumber, dad is electrician and between them have lots of very helpful builder mates so we’d do the works ourselves. 

The ceilings are still up in the bedrooms, the kitchen and bathroom. It’s just the lounge/hall that is bare, we’d like to re-wire so are hoping if they stick some plasterboard up it will be deemed habitable 😬 is that naive thinking?? 

If that's the case they would have a much better idea on costs, they have first hand look of the situation and no matter how helpful one can be on a forum that doesn't come close to actually viewing.

You only need to cost material, once you have a figure for that add the estimated labour costs plus some more then you have a price to offer which probably can't be beat 

We have a good idea what the repair costs are, I just didn’t know if the value of the property now is original value minus cost of repairs or if it’s even less because of the state it’s in. If that makes sense? 

hannah9000

mi-key said:

hannah9000 said:

mi-key said:

hannah9000 said:

The property is habitable as it has a working bathroom and kitchen, regardless we’d request the were ceilings put back before the lender survey. 

The seller (the deceased lady’s daughter) lives 3 hours away, and is having a hard time with the insurance company, and to be honest would be glad to see the back of the property as it’s a burden currently. It could take another 8-9+ months before repairs are complete and they can re market. I figure if she gets the insurance payout, and we offer to take the property off her hands for the right price it’s a win win. 

I still think you would struggle to get a lender to lend on it. If you could get the ceilings put in it would help, but that very much depends on the builders and insurance companies schedules, they may not be planning to do that for months. Plus its not just putting up some plasterboard, the electrics would need sorting and the roof space insulating. 

It also depends if the insurance company will pay her directly. Often they will only make payments to the builders to do the repairs, not directly to the homeowner. 

Can you do the repair work yourself? If you buy it for £250K then the repairs cost £350K you aren't really getting a reduction, plus the months of work it will take - a lot longer than builders if you are also working

Thank you, my husband is a plumber, dad is electrician and between them have lots of very helpful builder mates so we’d do the works ourselves. 

The ceilings are still up in the bedrooms, the kitchen and bathroom. It’s just the lounge/hall that is bare, we’d like to re-wire so are hoping if they stick some plasterboard up it will be deemed habitable 😬 is that naive thinking?? 

That will be handy then. It doesn't sound like its a huge amount of expensive work needs doing

The mortgage lenders surveyor / valuer will look all around the house to see what they think its worth in its current state. How big is your deposit for it? This can make a big difference as if they value at £200K but you only need to borrow £100K from them then it makes it a lot easier as they know they aren't taking much of a risk if you did default.

Its definitely a possibility, but does rely on a lot of what ifs and what other people are doing 

Normally properties like this are only bought by developers or builders who can get them for cash so don't need to worry about mortgage companies or surveyors etc... and can do a quick flip for profit.

I'd have a chat with the owner first and tell her what price you are thinking. If she wants £320K and the insurance won't pay her directly then it’s all a moot point anyway. If she seems happy with £250K then get started with a mortgage lender and see what they say and go from there

We’re just waiting for the owner to clarify things with the insurance company and she’s going to email us all the information she has got together including price. 

The property is no longer on the market, so no-one else knows it’s available - the sign outside it says sold as the agents took it off the market and then the pipe burst. We have our AIP from the lender and no chain…I’d like to think we’re a good buyer!