How much reduction for cost of work?

[Floppysphonics]

We have a house on the market for a relative. It has been priced fairly to reflect the fact it has downstairs bathroom only and needs thorough updating (kitchen bathroom) but is in clean, safe loveable condition as it is.

These days, I seem to see more and more property programmes where people take off the value of these things from any offer, despite the house being priced to reflect this.

Is this usual practice in the real world? I say this because one of the viewers wants to come back with a builder to see how much it will cost to put bathroom in upstairs.

I am expecting offers-that's standard, but surely it can't reflect tens of thousands of pounds of work?

It isn't exactly loveable...meant liveable 😉

I’d say if it has been fairly priced, then you’re under no compulsion to accept ridiculous offers.

That's what I had always thought. We bought our house and made slightly under asking offer, because it was what we could stretch to with beans on toast budget for next few years. We wanted to do lots to it, and have ended up extending, but if we'd taken the cost off, the house would have been virtually free!!

nothing, the value is for its current state

And, importantly, we didn't expect the owner to accept it-but it had been on market a while so they did.

if theyre bringing a builder round who says it will cost say 30k of work.. and the asking price plus 20k would then mean the house would then cost far bove the correct asking price compared to similar properties sold, then they may offer less and it would be appropriate to do so. you'll just have to see what they come back with.

Look at it this way: if it's going to cost you exactly the same amount of money whether you buy a house that's already refurbished or that you have to refurbish yourself then what's the point of putting yourself through all that hard work and months of stress and upheaval? Why not just buy one that's finished and save yourself the hassle?

For example:

House 1 (beautifully renovated home): £300,000 (total cost)

House 2 (requiring work): £250,000 (asking price) + £50,000 (refurbishment cost) = £300,000 (total cost)

So why bother?!

In the example above the second house is priced £50k below the ceiling price for that home in a fully refurbished condition. That's enough to generate interest in the property. If a buyer then gets a quote of £50k from a builder for the work over, let's say 6 months, then the buyer will, understandably, want a return on that investment. In this case, therefore, I wouldn't be surprised to see offers of up to £25k off the 250k asking price! This means that for all their hard work if they were to sell the property then the buyer will have earned 25k (by adding £25k of value to their new home).

Does that make sense?

It's such a difficult area to put a value on houses, that's half the trouble. You can't compare like for like because the plots were sold to individual builders and so no two houses the same. But we'll see. And I think we've got a decent agent who isn't prone to putting pressure to accept offers to get numbers.

@Soontobe60

I’d say if it has been fairly priced, then you’re under no compulsion to accept ridiculous offers.

Exactly

Mummy friend-the agent says house in fully refurbished condition would market for 75-100k more. Needs kitchen, bathroom and redecorating. I think the building work is to put upstairs bathroom in, which puts the house in a different category and would add even more value.

Going to sit tight...have had several viewings today and no offer yet so might be singing from different hymn sheet and ready to accept anything on a few week's time 😉

our house was priced 18K less than the done up houses on our street we reckoned on about 10K to do it up so we offered full asking price

@Soontobe60

I’d say if it has been fairly priced, then you’re under no compulsion to accept ridiculous offers.

Agreed - but be ready for negotiation if their survey throws up any horrors.

Oh gosh, of course. That's different though, isn't it? So is a cheeky under asking price offer.

Mummyfriend, we find the opposite in our area, people would rather do the work themselves and end up with exactly what they want, rather than, say, pay full whack for a place with a new kitchen, and get a kitchen that’s new but not what they want, and then be without the £ to have the exact one they would like 🤷‍♀️

I'd rather do the work myself too, then I can decide what kitchen/tiles etc I am going to have, rather than paying full price for someone else's taste.
Also it might mean I could do the work in my own time, possibly stretch to a better house in a better area, then save up for the work to be done.

Patas you are our target buyer! 🙂

Patas you are our target buyer! 🙂

Two second viewings today 🤞

Yes I'm the exact idiot in @MummyFriend's example... :)

We paid a fair price for our house because we fell in love and wanted to move quickly. It needed gutting to the bricks, full re-wire, new GCH and plastering, plus we're knocking down an internal wall and extending at the back one storey with bifolds.

Will be £££ of course and we are currently refugees at my patience-of-a-saint FIL's house until early/mid September - but THEN we will have our dream house in every respect and will not have to worry about anything (house-wise at least!) for the next decade.

I like light and clean but not sterile; some luxe elements but still a practical home for kids... it's all too specific for me to ever to find something I love "off the shelf"!

Hopefully you'll be fine OP and will find buyers like us.

Ha! Hopefully this house won't need as much work as this. No way are you an idiot - a discerning buyer more like 🙂

Sounds to me like the house has been priced to reflect that a) work needs doing and b) you want a relatively easy/quick sale.

Therefore as it isn't a buyers market I'd turn down anything that isn't within 10% of your target price - unless it's cash buyers can exchange tomorrow. That might appeal more.

Thanks Ariela, that supports what I think really. I know that at least one of the viewers was wanting put in an offer that reflected adding two extra bedrooms upstairs, but I understand the agent suggested it wouldn't be accepted!

We priced it fairly to get people in and not have to risk reducing the price really. An asking price offer would be very fair-we could have tried more but want a sensible fairly quick sale and hope really, in ideal world, for a buyer who can afford it at that price but not higher and do work at their pace. It's how the current owners got it-a real stretch but a forever home...as long as forever means!

That's a bit romantic-happy to sell it to the person who offers best price!

I don’t think you should worry, you sound sane and reasonable - wait and see what offers you get. I think people are mad when they try to knock £££ off for work they want to do when the price is fair already but it’s not unreasonable for people to get builders etc to give them an idea of cost.

I would rather do the work myself ... that’s why I live in a house without many internal doors, holey ceilings, etc -it’s a labour of love