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Is this a sensible offer?(19 Posts)
We're first time buyers currently considering putting an offer on an end terrace requiring extensive modernisation. Three bed, living room, medium kitchen, downstairs WC, utility and side lean to. Upstairs bathroom and toilet are separate.
Property is listed for £187k in the West Midlands. The highest a property has sold for on the street is £225k but was a semi. The highest an updated terrace has sold for on the street is £191k this year.
A builder has estimated £35-40k for the work. The property is also listed as off road parking as there is a driveway, however the kerb although low already (as is the norm on the whole street) hasn't been officially dropped as you have to drive up a grass verge to park - it's currently messy and muddy so definitely not off road parking - this will need to be reflected in offer.
The house is a deceased estate and had an offer fall through already so it's been relisted for 4 months now.
We're thinking £160k would be the a absolute most to pay without overspending, considering the likely resale value and making an offer of £150k, maybe even lower given the cost of work needed? Does this sound reasonable? We've not done this before! Thank you
Check the dropped kerb price with your Council, it varies wildly.
Is the builders quote for remedial work or for work to make it as you want it?
Have you more than one quote?
The survey for any mortgage will provide a price guide and along with this you can negotiate a lower price.
You don't want to go too low and lose the opportunity to be able to negotiate down following the survey.
Lots of houses sell very quickly as the asking price or near is offered. Then after the survey they renegotiate downwards but as the process is already underway the householder accepts rather than repost the house.
You seem to be basing your offer on the amount of work that you want to do to the house rather than the current value - £35K seems an enormous amount for modernisation tbh, what does that include? Is it an extension? Because if the house needed that much work to be habitable, it is unlikely to be mortgageable.
Has the Estate Agent given you any guidance on price? I would definitely query the 'off-road parking' if there is no proper drop-down.. Do you know why the previous sale fell through, has the price of the house ever changed during it's time on the market?
I would say it is a good starting point but family members selling a deceased estate are the greediest sellers I have ever encountered... without exception.
They could make the argument that it is priced fairly if you take the cost of works off the ceiling price of the street.
You have nothing to lose, but I wouldnt get my Hope's up if I were you.
Was the one that sold for £191k and end or mid terrace as end terraces always go for more.
But from what you describe and depending on the area (west Mids varies greatly) I'd say £160k is a reasonable offer.
If you’re not in love with this property, I’d make 150k my absolute max and open with 135-140k.
If you really want it, do as planned - 150k opening.
Full renovation isn’t only about money - it’s hassle and inconvenience for quite a bit of time.
Unless they’re in a hurry to sell then they won’t accept. Inherited properties can stay on the market for an age as the sellers often don’t need the money for housing purposes and they feel obliged to wait out best offer, almost as mark of respect for deceased. Low ball offers unlikely to be accepted as they may feel they are somehow letting down the deceased
I think I've found it. The one that sold for £191k (listed for £195k?) is absolutely beautiful and their bedrooms, lounge and kitchen are a lot bigger, yours needs a lot of work (the kitchen needs gutting doesn't it) but the rooms are still good sized and I can see the potential.
So yes £150-£160k. Lovely house but its been neglected.
At this stage only the one estimate.
The other property that sold for £191k was also an end terrace, it was the exact same house in terms of plan.
It doesn't appear to have changed price since it's been listed but I will ask the agent to clarify.
The work is to remedy as well as get it to the standard we want. Didn't want to put too much text in OP but work that will need doing is: full rewire, new boiler and relocation. Replastering/skimming entire house (including the artex ceiling at same time although not necessary), new windows, the kitchen is usable but needs an update and we'd go low - mid range.
The rest of the work would be choice like knocking bathroom through and newer doors etc.
Reassuring to hear the offer we were thinking isn't completely ridiculous... Although it may be to the seller! Definitely would not go over £160k, would easily be able to walk away if they wanted more, so I'm not too invested.
There are 3 bed semi's in the street that sold for between £135k and £173k in the last few months?
@comefromaway yes they have extended the kitchen into the WC/utility if you're looking at the same house. Blue kitchen? And the one I'm referring to lots of wooden panelling? Sorry to be vague, hoping to retain a little anonymity on here
@comefromaway as far as I can see only two sales this year £191k end terrace and £135k semi
Won't say any more but yes, its not just cosmetic is it. It's a project for anyone but could be really lovely when done as you can tell from the other house.
@comefromaway thank you. Yes, the other one is lovely, that's what I'm seeing and hoping can be achievable. Thanks for your input. Impressive sleuthing skills
I agree that the sellers of most houses that are being sold as part of an estate tend to hold out for as much as possible. I remember an estate agent once telling me lots of people saw a reduction in the price as being an insult towards their loved ones - although personally, unless the money was necessary, I’d prefer the idea of the house going to a lovely family even if it meant getting less for it.
Realistically OP, the house’s price should already take into account that it needs to be rewired and a new boiler installed.
Orange - in my opinion it doesn't take that into account.
@orange, yes as @comeaway sees, it really doesn't seem to have taken that into account at all. It looks like an asking price for something that's already in a reasonable condition. I do have a feeling the sellers won't entertain low offers based on the list price but we will see.
You lose nothing by placing a low-ish offer and negotiating.
If they place too much emotional value on it and don’t need money at the moment, so be it - it will be on the market for a while.
Thanks for the advice all. It's reassuring to know it's not that low it's ridiculous which is what I was worried about. Nothing to lose is how I'll approach it.