Any advice on how to make an offer?(9 Posts)
We have recently decided we would like to try & move as our one living room is being used for so many purposes such as eating, playroom, office, games room. We want to stay in the same village as dc's are settled in schools and we love it here.
Happy to stay with 3 beds but want more downstairs space. We've viewed a few houses and it's become clear thatnhe only
way we could afford to buy something with more space would be if it needed some work doing.
We've seen a house which has the space we want and the potential to extend/convert garage and loft. The lt's only in the next road to us and it could make a lovely family home.
It is however extremely dated. Current owners have lived there 25 years and it is very old fashioned. Every room would need decorating/new carpets. We would want to convert garage to a playroom & do the kitchen.
The house is on the market at the top of our budget but the EA has told us the owners are very open to offers as they have a house to move to.
How do you decide how much to offer when you know there's work to be done that we'd need money for? Should we try & buy the house even if we can't afford to do everything to do it straight away? Anything of a similar size that's in a more modern condition will be out of our reach in this area.
The house is on at £430k.
Interested to hear if anyone's been in a similar position what did you do?
It all comes down to how much you think it is worth. Don't just go on how much it would cost to do it up and then how much it would be worth - often people will pay a premium for houses that need some work. The fact that it is at to top of your budget will be immaterial to the vendor to some extent - if you are not offering the asking price you are hardly going to go in and saying you could afford loads more but thought you would just try to get a deal. How long has it been on the market, have they reduced the price, what else can you buy for 430 in the same area, is the structure sound?
Find out how long it's been on for. If it's a while I would be tempted to offer 380.
Before you go any further, is there no potential to do work to your current house to get the living space you want? That will be far cheaper than buying somewhere else that needs a lot of work doing to it.
Add up the costs of moving, including stamp duty, and what you think replacing the kitchen, etc will cost and consider all that before making an offer. What equity will you have from your current house?
Has the other house been on the market for long and what have similar properties sold for recently? Be careful when making an offer that it doesn't come across to the sellers that they are effectively being asked to pay for your new kitchen, etc. if the kitchen is dated, but basically in good condition and serviceable.
Once you've done all of that, you can think about an offer - if there has been little interest I'd be tempted to go in low. If they are downsizing they will have made money on this house anyway after 25 years. Maybe go as low as £375k and give evidence and reasons for your offer. You can always increase it to meet them in the middle.
What Wow says about downsizes is true. We downsized last year, our house was on the market at considerably more than the smaller one cost. We put our house on at the market value, but accepted a lower offer, it enabled us to move on with our new life, we had made a good profit and the house went to a lovely family to make it their new home.
I'd make a sensible realistic offer, especially if the sellers have another home to go to.
Thanks for the replies. I think it was on the market last summer, they had an offer which was rejected & the person interested then decided to buy in another area. It went back on the market in October.
We live in a mid terrace with small garden so have nowhere to go with an extension. We are prepared to move with all the costs that entails as only plan on doing it once so it needs to be worth it in terms of extra space/potential space.
We have a fair bit of equity in our current property & should have a very decent deposit.
How do you estimate what a new kitchen/extension would cost? We really have no idea as never done anything like this. You're right Wow, the kitchen is perfectly functional just really dated. I guess that's not a justification we should use then for offering less? What sort of things would be advisable to use as evidence & reasons for a lower offer? Sorry I know it's all probably obvious questions I'm asking but not had experience of negotiating on house before.
Theoretically the state of decor and age of the kitchen etc should have been accounted for in the estate agents valuation so the house should be on for less than a similar property that has been recently done up. However estate agents (and sellers) don't necessarily get that right.
What I'd do is get a local builder to go around with you to quote for the work you require. That will give you an idea of how much it'll cost to get it up to date. Don't forget to ask about the bits you can't see too - are the electrics up to date, boiler and plumbing etc. If they haven't touched the decor in 25years then it's likely none of that has been updated since then either. That can cost a whole lot more than just decorating.
You can then make an informed decision as to whether the cost of works, plus the asking price will add together to give the value of a house that is up to date and you can see if you need to negotiate some more.
We have bought, renovated and sold a couple of times.
You dont need justification to offer less. You decide what you can afford to pay for the house plus renovations. Subtract the cost of renovations from that number and that is the most you can afford to pay. Offer less than that to give you a bit of haggle room.
How old is the house?
Assuming the house has had nothing significant done to it for at least 25 years then you should consider:
- Upgrading the wiring. You will probably be looking at a new consumer unit (fuse box as was) plus rewing the kitchen.
- Replacing the central heating system: how old is the boiler?
- Upgrading the plumbing
If you are considering extending at some point in the future then include to possibility of extra doorways & rooms in the discussion with contractors for the above.
With the 'infrastructure' of the house upgraded you can then look to installing a new kitchen/bathroom.
Sorry, total cross post with minijoeyjojo! I was discussing the finer points of house renovation with DH!
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