To loose potential forever home over £7000?

[Floatyunicorn]

Hi all

Me and partner bought our first home 2 years ago, ive never settled here and both know its not where we want to stay forever. Im not happy with the area, but it could be worse. The house itself is lovely, we have fully renovated over the 2 years, if i could pick my house up and move it i would. We pay an extremely affordable mortgage thanks to buying before all the houses went up in price, and live comfortably at the moment. I only work part time at mo until my youngest starts school in september when i will be looking for a full time job, but have no idea when that will be. I cant go full time in my current job.
We are to stay in this area as we have a child already in school and a child to begin the same school, my oldest absolutely loves school and his friends so i wouldnt dream of moving areas.

A few weeks ago a house came up for sale that is definitely our forever home type. It was cheaper than usual houses in those streets so we rang and asked more info, they offered to let us view it even though we didnt have a buyer. When we went in we realised why it was cheaper, it needs ALOT of work, every single room and ceiling plastering, there was a hole in bedroom ceiling indicating a leak, garden is massively in need of sorting, owner has attempted to cut some small tress but left the cuttings in a big pile in the garden, fence panels all broke,potential damp in bedroom, kitchen bathroom needs replacing. Luckily my partner is very handy and did most renovations in our house so worked out alot cheaper. Estate agent said there had been alot of viewings but no offers due to this.
The house then sold before we had chance to go any further but then 3 weeks later came back on the market, we rang n the estate agent said the chain fell through (no idea if this is true or something came up on survey, she made a point of saying it hadnt reached survey stage)
She told us the offer he had accepted. They came to value our house,They also had a buyer very eager to view our house which she did. We spoke to our mortgage advisor.

Mortgage advisor has told us what we can get, and informed us solicitors etc have upped their prices due to overload of work, so after working out solicitor fees, estate agent, stamp duty etc. It would make a mortgage of the price he accepted out of reach slightly. We have a small amount of savings but if we went for the price he wants, our savings would be wiped out, leaving us with nothing to actually decorate or buy materials, nothing at all.

We have spoke to estate agents and told them £7000 less and they say he has said definitely not, estate agent admitted it was hard to value the house due to its current state.
I dont actually know how we can stretch ourselves anymore, and partner has said no way should we when the seller hasnt even made an effort to improve the property in 30 years (he was renting it and lives a long way from here)

Any advice? Should i just let it go?

I would be very wary of stretching yourselves when the house needs this much work, particularly in the current climate of rising costs. Even if the seller did agree to £7k left, how much buffer would that leave you for the renovations & repairs? Whenever I've done major house renovations there is always only so much you can plan for, it's best to have a bit of a buffer as you just don't know what sorts of issues you might find along the way.

I think only you can answer that. I’m assuming £7000 is a small percentage of the total value of the house? But can you live in it without doing anything to it while you raise the money to renovate it?

I think if it’s the house/location you want you wouldn’t be quibbling over £7000. I walked away from a house over £5000- it just wasn’t the one for me to pay the extra 5 grand.

It sounds like it will be a complete money pit. And potentially you will end up spending a fortune on the really important but boring things you can’t see like wiring and plumbing etc. And you don’t know what will come out of a survey.

But. Is this the only way you would be able to afford to live in a nicer area?

Are you prepared to put up with potentially living in the house as is?

I wouldn’t up my offer. I think I would leave it with the EA and say you cannot afford to go higher and just see what happens.

If you wouldn't be able to afford to do the work, then you sinply cannot do it.

With interest rates rising, your repayments could quickly go up. There is always another house.

I also wouldn’t stretch myself to the max for this house. It will likely be a money pit and costs of materials and labour are increasing where wages aren’t.

I wouldn't touch it with a barge pole, it'll cost you a fortune to do up & could take years. What money will you have to spend on doing it up? Is it.even habitable in its current condition???

Where are the funds coming from to renovate it?

Can you afford the mortgage plus other rising living costs at a rate of say 5-7%? What about a higher percentage? If not don't bother. You can't renovate it and by the end of your mortgage term you may not be able to afford to keep it even after 5 years.

Hey @Floatyunicorn your grip won't suddenly become loose on the home you're hope to buy.

But you might lose your potential home if you can't stomach the renovation costs.

Walk away. Whatever you think you will spend on the work, it will cost more, it always does. Something else will come along.

I wouldn't touch the house either because of the following reasons:

1. the renovation costs have significantly increased due to Brexit, pandemic, material costs, staff shortages

2. once you factor in the above costs, the house is overpriced & isn't a bargain anymore.

3. the cost of living will increase again in the autumn - I'd wait a year see how you manage financially & then make a decision on house move

4. lots of houses are going back on the market reduced because they were over priced & banks were refusing to accept EA valuations

Thank you, partner is adamant to not up the offer (deep down i cant blame him and agree) houses there usually get snapped up, so for this to be sitting for weeks shows that others are just as wary as we are.
Its liveable i think, but the potential damp worrys me for my child with asthma so we would either move into my mums or brothers house for a few months, would be cramped but doable.
What is worrying me the most like you have pointed out is cost of living rising and no savings to fall back on. Im sure i will get full time work at some point but cant see into the future so no idea when that will be.
To be honest we would have offered a little less than £7k off but had a feeling he would tell us where to go, estate agent doesnt talk very highly of the sellers personality.

Such a long op for really quite a simple question.

Your partner is sensible.

Concentrate on cutting your overheads, increasing your savings and maybe take an extra remote job to top up income. There are lots of jobs available so it's easy to pick up an evening shift or a remote p/t one.

Why you would possibly stretch yourself for a house that clearly needs 10’s of thousands of work done? This shouldn’t even be a consideration.

For me, if it would be ideal once renovated I would be thinking, can I live in it until I can afford to renovate it; is it safe (including for DC), would it get me down to live in it unfinished, will it affect any other forward plans I have.

More specifically
-every single room and ceiling plastering - I could live with that

-there was a hole in bedroom ceiling indicating a leak - survey will find out more, could be a deal breaker as would need immediate work

• garden is massively in need of sorting, owner has attempted to cut some small tress but left the cuttings in a big pile in the garden - not an issue at all in my book and something i could get my teeth into without costing anything

-fence panels all broke - this could be an issue in terms of keeping DC safe

• potential damp in bedroom - again the survey will show how much of an issue this is, potentially big

• kitchen bathroom needs replacing - wouldn't be an issue for me

But it sounds like your DP isn't on board anyway and as it would be him doing the majority of the work I'd feel bound to go along with his feelings on this.

Apologies for formatting - no idea how the bullet points happened!

It’s hard to say for sure without more detail but I reckon you would need to spend £100k+ in the new house, based on 30 years of slow neglect and some damp/plaster issues you are almost certainly going to need to do a full renovation.

The thing that I cannot follow from your long OP is that you love your current house but hate the area but your child is not moving schools so this new house must also be nearby. I can’t understand how the area of the new house will be drastically different if still in same school catchment. Sure, the street itself might be nicer but the overall local amenities will be similar.

Op don't let your heart rule your head!

Are you prepared to lose the cost of a survey? If you are, I’d get it done- it may well bring the asking price down.

If you want the house, offer what you can afford and sit tight. If it’s not moving, they may well come back to you. Don’t overstretch yourselves though.

Your partner doesn’t really sound that enthusiastic.

The seller’s lack of maintenance over the past 30 years is possibly why the house is close to your price range, and not necessarily a reason to drop the price to match your budget.

Have you had quotes for all the work? Have you factored those costs into your calculation as to whether you can afford it.

Also consider the time upgrading will take. You could be spending a lot of time at your mums!

It is not only the £7k though, you would need ongoing funds to renovate. Costs of materials and builders are rising fast, even assuming you can source them.