Doing up a house for selling(16 Posts)
I would like some advice please! Our house needs a lot of work - new guttering, new windows, patio needs removing as it breaches the damp proof course, some work to the roof, work to the staircases, new kitchen, new bathroom, decorating etc throughout. There is also some work we could potentially do like a small extension to the kitchen, or at least removing a small half wall to open it up a bit.
I got an estate agent round to get a current value on our house and an idea of what work would bring back the most value.
We have been looking at replacing the windows and front door recently and quotes are coming in around £17k so just wanted an understanding really
before we start spending large amounts of money.
He basically said that he wouldn't bother doing any of the work other than painting and maybe replacing the bathroom with something cheap, He said that we would probably only get back a maximum of 50% of what we spend. This was shocking news as we bought the house to do it up and sell, hopefully make some money and move on. It's totally thrown us and now we don't know what to do. I can't understand why this would be when there are people who make a living out of doing up houses! We did our last house up and got more for it than we spent compared to other similar properties being sold that were not done.
Could what the estate agent said be correct? What work would you do and would you not do?
I wouldn't base my decision on the say so of one estate agent. Have you been keeping an eye on the market locally? Have you seen what is selling? Did you get the house at a low price and have you costed the work needed to update it? Surely if you bought it to do it up and sell you did research everything before you bought?
As wowfudge said, making a profit is usually down to the price you bought at rather than what you go onto do to a property. Having said that, a lot of estate agents are desperate for instructions and will alwaysi insist it is better to put a house on the markets sooner rather than later - speak to some more agents and get more quotes for works as they vary enormously. Work out what needs to be done and calculate if it would be more profitable to do the work or sell on as is (based on several agents' valuations combined with your own feel for the market).
If your place needs work perhaps the estate agent wanted to sell your place to his favourite developer who would do it up and sell through the agent again. Thus making the agent two sets of fees rather than one.
So no I wouldn't believe a word of it.
Have a look at Rightmove and what has sold in your area, how much for, and what this equates to per sqft (look at floor plans for sqft). And then compare condition of these to condition of yours.
Also get another two or three agents around.
Make it clear to them that you want to refurb with a view to make some money and you're not interested in selling to a developer in current condition.
Agree with the others. An estate agent want his commission. If he's charging around 1%, the difference in commission he'll earn based on the selling price now, and the selling price once the works are done, is insignificant. He will just want the house on his books.
So as the other posters have said, do you own research. See what houses are being marketed for locally and what they actually sell for. In my view, the structure of the building needs to be sorted out - windows, roof, damp proof course, staircase. I think most buyers can work out the cost of a new bathroom and a new kitchen, and subject to price, are quite happy to take that on. I wouldn't entertain a house though with all those "big" jobs (certainly with a family in tow) unless it was rock bottom price and we could live somewhere else whilst the work was done, or you're selling to property developers.
Wow, very interesting we are in the same place as OP and my estate agent said the same thing, decorate and replace bathroom. Will definitely do some more research now and get another estate agent to view . Good luck OP !
The only people I know who've made much doing this are ones in the trade or very handy and can do things themselves, so it therefore costs a lot less for them to do it, only materials and a few pints for friends who help out.
It is more of a seller's market lately so I wouldn't be surprised if you aren't getting the steal that you might have a few years ago on run down houses too, so I wouldn't completely disregard what the EA is saying.
Only of my friends just sold their house with planning permission because they didn't reckon they would make back what the actual extension would cost or anywhere very close to it.
If you're going to develop successfully (as an individual) you really will do a lot better if you can do a lot of the work yourself.
The agent may be largely right in the scenario you describe.
On the market these days, one generally doesn't see the huge chasm between 'done-up' and 'needing work' that we used to see years ago.
Canny buyers will go into 'needing work' property and have an idea of what needs spending - the odds are loads of ordinary people went to see your house and came up with the same figures as you to improve it and walked away either because they don't want the hassle or if they're developers, because they can't see a profit.
If you have two identical houses in the same street - one needing work - the other not - there's always a difference in the price - but it's not always enough of a difference to make it worth doing up the house to sell on - sometimes there's no profit - it's only worth buying the house if you actually want to live in it - not develop it.
Maybe the agent was telling you this.
Maybe he was saying - the mark-up you need to make a developer's profit just doesn't exist in your project/area.
We've restored a few quite special period houses - for example a large Victorian that was converted to 4 flats in the 1960s, a Tudor that had been taken down piece by piece in the 1930s and rebuilt elsewhere, a Georgian thatch that had fallen into complete disrepair - none were initially intended as development projects with a view to make money, we just changed our minds and decided to move on between 3-10 years after completing the work.
As we were doing it with our own high standards in mind, the plan being to stay long term we used high end finishes and cut no corners. We also DIY everything except some plumbing, electrics & roofing, living on site for the duration as well as sourcing some items on eBay etc at greatly reduced prices.
The large Victorian we spent about 80k (early noughties) and sold with a hefty 385k profit. The Tudor we made a stonking 60k loss. More recently (2014) we made a small (35k) profit. These were all in different parts of the UK.
Timing is everything, as well as purchase price - the first and last of my examples we bought at very good (low) prices whereas the Tudor we paid too much for as we hadn't researched sold prices in the area thoroughly enough. Once finished the recession had hit - our house was infinitely more saleable, selling in 10 days when other properties were hanging around for literally years - so chances of making a profit were greatly reduced.
I take everything EAs say with a large helping of salt - we recently asked the EA who sold us the house we bought in 2014 what we'd need to do to see a profit were we to sell in the next 18 months (slow moving area again - although our house is in a desirable location locally it is unaffordable to younger families and those who could afford it tend to move a bit further out with more land) and he said "do nothing except rewiring which will add around 30k to the value" - bearing in mind we got it for 80k less than the asking price. It definitely needs a new kitchen and complete redecoration throughout as it's woodchip heaven.
Next door house - similar size detached period property but all the guts ripped out, in need of new kitchen, bathrooms, redecoration and fugly by comparison - the owner bought at auction last year for 40k less than we paid and 55k less than the seller paid 12 months previously. He was told - by the same EA - that if he did a quick paint job and nothing else he could see a 100k profit.......go figure
Thanks everyone for the really helpful advice. We bought the house for £415K just over 3 years ago, at the time it was valued at £450K, but owners wanted to sell it quick so put it on for £425K. We were the first people to look at it. We have made a massive profit doing nothing (according to the same estate agent) but we would like to do some work for us to live in it happily, and would like it if we could make a profit doing so. It was definitely a good price at the time compared to the many other properties we had seen in terms of size and work needed.
I will get some more agents round and do some more research as suggested.
Good luck to you too whatstheplanshil!
I'd thought you'd only bought the house recently - but as you've been there 3 years, I'm sure you've made your gain already.
In your situation if, for example you bought at £425 and say it's worth £600k now, you've already got £175k in the bag and now you're weighing up whether by spending, what? - up to £20k you can add much more.
How much more would you need to add to the sale price to make it worth your while spending out upfront and putting up with loads of hassle for months? An extra £10k, an extra £30k or more?
I'm not sure I'd bother - we tried this scenario before - bought a flat at £150k in bad condition - lived in it - spent nothing.
Three years later it was worth £205 in it's current state. (potential profit £55k with no hassle)
Revamped flats were selling at £220 - £235.
We spent £25k + and drove ourselves mental to make not enough extra in real terms selling at £250k - actual profit about £70k in the end and 6 months of hell - wouldn't do it again - living in it, for that long, for that little extra.
Sounds crazy maybe - but it was hell.
If you have already made a profit, why do valuations now if you are staying in it? Do what you want for you to enjoy! Just don't spend silly money on flashy kit that you will never get back.
If you watch a lot of property improvement programs you'll find that v. often they're not making money based on the improvements, the profit they're making is on actually just the rise in the housing markets. Frequently they make less money doing it up, than if they'd just left it empty and done nothing for the same time.
It really depends on the house and the area.
I agree with the general advice that two identical houses on the same road one done up and one needing doing up will not be on the market at enough of a difference to cover the doing up cost. However, the done up house will sell much much quicker. Done up houses are much more saleable. If you need to sell quick then do some work repair work but don't go the full doing up route.
If you market a house with a lot of obvious repairs then buyers will be put off and it will sell slowly and eventually to a professional who will do the work quicker and cheaper than you can. If you market it with no basic structural or major repairs required and a tidy garden (which is actually a cheap way to spruce up your house and much more important than people think) then you should get it away quite quickly to people who are willing to have a repaint and put in a new kitchen.
I have just done up a Georgian house to live in and I don't expect to make any money on it - I live here though.
I am currently buying a former nursing home and that is not suitable for a family without significant work and it definitely cant be just moved into by a family. Therefore, only professionals can buy it and in my area there is not a lot of people in that category. I was the only bidder and got a significant discount because the seller needs to sell quickly and cant afford to either do it up and has no time to anyway.
I'm not sure I'd bother to do the work if a profit is already within your grasp were you to sell now/imminently. Not really sure if your plan is to stay or sell though.
That's spoken as someone who paid a similar price for a 5 bed 2500 sq ft house in rural Wilts as a family member did for a 2 bed 650 sq ft flat in SW London (purchased within a few months of each other), but they spent around 10k on minor 'improvements' that took a few weekends whereas we forked out 100k and knackered ourselves out working on the build nonstop for three years. Both properties were sold again within a matter of months for exactly the same price. Bitter? Me?
That's London/the SE for you. It's put us right off burning ourselves out physically and mentally in the name of restoring a house to its former glory
although we're suckers for an unloved house and not ones to cut corners in the process
Sometimes a 'done' house can put people off- for example if a kitchen is new but poor quality or a style that I wouldn't like it would put me off as I'd feel bad about wanting to remove it.
You say it needs new Windows- if they are old sash windows, I'd leave them in. UPVC would put me off- it would be better to leave the new owner to decide.
It's really tricky. If it were me, I'd make changes that I wanted to increase my own enjoyment/comfort.
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