What to offer on doer-upper?

[threeleftfeet]

We've seen a house we might actually be able to afford, yippee! And none of the 3 bedrooms are a box room (first we've seen in our price range!).

It's priced at £157,500, but Property Bee tells me it started at £174,950 just 3 months ago, and they've dropped the price 3 times since then. So I guess they want a quick sale? There's no one living there anyway.

Annoyingly, the estate agent wouldn't give any decent clues on how much they might be able to accept.

What would you think it was reasonable to offer?

Interesting!

The estate agent just called to ask us what we thought. I said we were a bit rushed when we looked round (estate agent 20 minutes late and we had our 3.7 year old with us) so we'd like to come and have a better look.

He then said "I think it's OK if I tell you" that if we would go for it "quickly" he thinks the vendors would accept £145K.

Does that mean offer £135K then?!

The viewing's on Monday. Will be doing some research on house prices etc before then.

Are you looking to buy this place because want to find a house for the medium or long term and you think this house has the potential with a bit of time and effort to fit what you and your family need and want? If so I'd personally not get too worked up on what it costs compared to other houses and instead figure out what you can afford as a maximum. Then work out what you will definitely need to spend as a minimum if it doesn't need substantial work doing immediately, add a bit of contingency and also set aside a bit for nice things, such as treats to maintain your sanity when you're in the middle of whatever work you do and it all seems too much. Put an offer in below the maximum you can afford to pay but make it clear that it is subject to survey and assumes major non-cosmetic work is not required. Then if it becomes apparent there are bigger problems than are obvious you can renegotiate.

If you plan to do up and sell on quickly then price at the outset is more of an issue. Otherwise it's about what you personally are prepared to pay now based on your own finances to get the home you want.

We want a home. Medium term. (We'll upgrade once we can afford it! But probably many many years!)

We want a 3 bed house (of which at least 2 aren't box rooms), with potential for growth (loft / extension). Simply put, we can't afford this in the areas we want! So will have to compromise somewhere.

There are three good schools in town, so three areas we're looking at.

One school is Ofsted "good" rated, and in a part of town with lots of terraced small houses - think Coronation Street - which I like as lots of families.

The other two are Ofsted "outstanding" rated, and are in the Old Town. We both love this part of town, but thought it very unlikely we'd find somewhere.

This doer-upper is near one of the outstanding schools. It'll be great for DS.

Ooh, I drifted there. Meant to be thinking about the financial side!

We have a finite amount of money from the sale of our existing property, to buy this. We will have some money left over to do the basics, so it's liveable, but once that money's gone, we will have to live with it not as we'd really like it for a few years.

There is no more money to do anything else for the moment.
No savings. We're on a low income. No bank will loan to us as we're both mature students at the moment.

We plan to get a mortgage to do the works in a few years time. But I can't see this happening for at least 3 years.

What this house means for us is a chance to send DS to a great school, and live in a great location. Albeit in an ugly house - for the next few years at least!

Our other options seem to be pretty, but really small houses with not enough room for all the stuff we already own, let alone what will come with another baby on the way! With no potential to extend.

I am worried about the overall cost of the works though. Will need to price it well this weekend I think.

Do you reckon the estate agent saying the buyer will accept £145K means that's actually the lowest they'll go, or that that's what they want us to offer but they might go lower?

If it helps I will tell you about a house I offered on.

A few weeks ago I was told they wanted £150,000. I was told today they will drop to £147,500.

According to that young cocky agent no market worries. I can see no no houses moving and know other sold prices and spoke with another mature agent who confirmed market is dropping.

I am very wary of putting offers in, agents and buyers are deluded in a falling market.

Bum. There's an investor interested in it too apparently.

Also a couple who put in a low offer (he wouldn't say how much) but haven't upped it.

It's easier to go up from a low offer than down from a high offer...

That's the risk with doer-uppers, developers start sniffing around. That's what happened with us last year. We saw our house when it first went on the market, liked it but weren't in a position to proceed. A couple of months later the price was dropped and we had an offer on the place we were selling and arranged another viewing. another buyer, who we think was an investor, offered the new price and was accepted. We decided just to go for it, worked out what we could afford to pay and put in an offer half way between the old and new price that was accepted.

A bit of a crazy strategy but we hadn't seen anything else vaguely suitable in our price range and knew it was a long term purchase. The fact that a developer was prepared to pay the new asking price we felt was a good sign, but we didn't need to worry in the same way as they would about being able to turn a profit quickly.

a year on it's habitable (there wasn't even a kitchen) but still scruffy buy we have not spent much at all. We will have to spend more in the future, but a lot of this is still optional, ie because we're extending. I still have my rightmove alerts set up and only about one or two other houses have come up that we would have considered and could afford.

we were in a difficult position as we were reliant on seeking and a mortgage. If you have cash and don't need a mortgage you can sell yourself anyway to the seller on this basis. You're not dependent on a mortgage being approved etc.

Do you think that the investor really exists?
With mention of this other party and proposed £145k it slightly sounds as though the agent thinks you're a good bet and may just be trying to force your hand? Alternatively it could be new price, new interest!

You are a cash buyer which puts you in a good position.
You can always increase your offer, maybe go in close to £130k saying it is your "first offer" to gauge the position and see what happens? Stress how fast you would be prepared to move etc. but also that you are not desperate given the current market drops.

If they don't bite or come back with a decent counter offer, you will have to decide if it is worth the money. The market is falling and other houses previously out of reach might start falling into your price bracket. I suppose it depends on the housing stock in your area and if this is an unusual house or just unusual for your budget and the first one to come low enough for you?

"Do you think that the investor really exists?"

That thought had crossed my mind!

They have just brought the price down considerably though, and to be fair, I wouldn't be surprised if there is some other interest because of that.

The "investor" is seeing it for the second time tomorrow apparently. We're seeing it again on Monday.

We're not too worried though - we're not going to go overboard to get this house, we'd like it, but we've only been looking 5 minutes and the market is in our favour.

So I think yes, we can play a cool game :)