Advice on offering on a do-er upper

[thiskitten]

Im a total rookie and DH is clueless - please help. We bought our first flat about 5 years ago and it just needed painting.
We've been looking for a family house for 2 years and haven't found one we love.
Now we've found a house we love. It's a probate sale and needs gutting, new kitchen, new bathroom, possibly/ probably replastering. But it could be amazing - it's big enough for now and there is loads of potential to extend should we need to. Ideal location that rarely comes up. Catchment for outstanding schools.
As far as our very uneducated eyes can see there aren't any structural issues. But we will obviously get a survey. We as far as I remember we do this after our offer has been accepted (assuming it is)?
If the survey throws up major issues am I right in thinking it's common for people to revise their offer to take such issues into account? Or on a house such as this which obviously needs gutting is it just assumed you are happy to undertake the work?
Offer wise - there was a sale progressing on it but the sellers put it back on the market apparently because the buyers sale / chain was taking too long. The vendors are now considering a lower offer from another offerer. We are cash buyers so are hoping this will give us some sort of edge as they are clearly keen to sell. Would an offer of 10% under the "guide price" be a good place to start?
Any advice gratefully received!

Offer low, listing all the work you can currently see as the reason for the low offer. Assuming they accept, get a full house buyers survey done ASAP and then revise the offer down when they uncover the inevitable issues. Also take a builder round if you can before offering at all, as they will see all the issues you can’t.

Is 10% a reasonable reflection of the amount of work you have to do? It's better to go to the agent and say, 'Clearly we'll need to spend £20k replacing the kitchen and bathroom, and another £5k on the out-of-date wiring, etc, so our offer reflects these costs, and it's £x.'

Then, as Jonty says, take a builder round and see what invisible stuff also needs doing - damp, roof issues, insulation, for a start - and if it's going to cost another £15k in their opinion, revise down. If the vendors turn down the offer, and you don't have the margin to cover it, walk away: there's really no point getting trapped with a fixer-upper you can't afford to fix up, even if it's a bargain. You have to live there!

Do you think the house is priced for its potential value or its current state? Is it reasonably priced in comparison to similar/neighbouring properties? Sounds like the vendors need to sell quickly so I’d go in just above a cheeky offer stating cash buyer/no chain then go from there.

It will depend a lot on the asking price, compared with others locally.

A dd offered (and paid) slightly over the AP for a doer-upper, also a probate sale and needing a lot of modernisation, BUT it was clean and liveable, and priced at rather less than at least one very similar nearby that was both dirty and manky, as well as needing total renovation.

yes, good advice here, it depends on how it is priced, we have just bought a house which is not quite a do-er-upper but needs more work than the average house of a similar age, if you see what I mean, we got a discount, but it was only about 1% of the price, but this was because it was already priced lower than similar properties in better conditions

I agree with the other posters. Make your offer inclusive of the work you can see and be specific about it, and then say subject to survey (which is usual anyway). You can then revise offer down if survey throws up any surprises (which it almost certainly will).

If it's a doer upper it is likely to need rewiring and possibly new plumbing as well so think about that.

If it's priced well, it will sell quickly so it depends what the market is like where you are. A house with great potential which comes up rarely in a fantastic location - chances are, you won't be the only ones to think like that. In a similar scenario, we paid asking price as cash buyers to fend off several other asking price offers after 2 days on the market. It was a fair price which we willingly paid after 12+ mths house hunting, we realised that we could only get the house we wanted in a specific location if we were prepared to renovate one that came on the market. Our house was the first one to come on the market on that particular road for 15 years. We considered ourselves lucky that it didn't go to sealed bids!

Does the price already reflect the work needed, or is it in the same region as properties of the same size in the area? If the former, deducting the entire cost of the work needed probably won’t fly.