How much should we offer for this house?

[ninkyno]

House Needs a lot doing. Hasn't been updated since perhaps the 70s- new kitchen, bathroom, wallpaper peeling off the walls, etc. Been in the same family since the 1950s when the house was originally built. It's on for sale at £775K. Our budget is £740 max. How much should we offer on it considering how much work needs doing to it. This is our second property purchase after a long time and I'm totally out of ideas on how to approach the whole process cautiously but wisely.

It's a probate property and offered with no upper chain. We have just one person below who is a FTB (currently living with parents).

NB. Property prices are mad here- this property would've pre-pandemic been listed at around £650K.

New kitchen and bathroom needed*

Post link

Well am guessing you need to rewire and does it have good plumbing and heating systems, and good windows?
Just with the things you have listed though, depending on your budget, you could spend £30- £60k

Budget wise is it 740 with extra for the work on top or is that inclusive of what you'll need for the work?

@Whiskersonkittens21

Budget wise is it 740 with extra for the work on top or is that inclusive of what you'll need for the work?

That's without all the work that needs doing. We'd have to save a good couple of years before we could carry out any works though.

How long it is on sale? Its depends on the demand and area. Also how much seller wants to sell it. Our current property was on sale for £810k we got for £775k two and half years ago but the property was 1 years old without needing any work. I think you can try £735 if they do not accept say £740 max. Thats what we did and seller accepted the offer. Good luck.

Without knowing the area, properties in the area, size etc, its very hard to say. Finger in the air scenario.

We bought a derelict (empty 8yrs) probate property, no chain either mid 2020- so early covid. Equally in need of complete stripping back, no working kitchen, no heating, artex and an array of BRIGHT colours and textured wall papers in every room from the 60's!

Property was £400,000. We initially offered £300,000. Eventually got it for £380,000. We were cash buyers and also planned to return the home to a family house- and not knock it down for bunglows as an investment. Apparently this is what clinched the deal over other offers of a similar/same amount from mainly buildings wanting to knock it down.

If your max is £740,000, I'd possibly go for £700,00 or less and see how you get on. You can always go up- but never down. What it 'might' have sold for pre-covid is irrelevant, also the fact it needs work- the sellers and RE are obviously aware of that too. Best of luck.

@Shinestar83

How long it is on sale? Its depends on the demand and area. Also how much seller wants to sell it. Our current property was on sale for £810k we got for £775k two and half years ago but the property was 1 years old without needing any work. I think you can try £735 if they do not accept say £740 max. Thats what we did and seller accepted the offer. Good luck.

It's been on the market since just before Christmas. Apparently they've had offers below £700K but they were rejected with a warning to the EA that they'd not entertain anymore offers from those buyers again!

We like the house, good schools, good area, well proportioned, etc. and would pay £740 straightaway but I don't want to offer that because it would leave us absolutely zero room for manoeuvre!

We bought a derelict (empty 8yrs) probate property, no chain either mid 2020- so early covid. Equally in need of complete stripping back, no working kitchen, no heating, artex and an array of BRIGHT colours and textured wall papers in every room from the 60's!

Yup- this is exactly the same except the kitchen, we've been told (hope) is fully functional!

Property was £400,000. We initially offered £300,000. Eventually got it for £380,000. We were cash buyers and also planned to return the home to a family house- and not knock it down for bunglows as an investment. Apparently this is what clinched the deal over other offers of a similar/same amount from mainly buildings wanting to knock it down.

£740 is the absolute MAX we could afford and includes every penny we own! We have little ones and would need to live in it as is so want to have a few pounds left over for a cheap and cheerful decorating job!

Just offer your max (minus anything you’ll need to do immediately and contingency for things braking down). Then if they reject, you know you won’t be able to afford it and unfortunately have to let it go, but you know you’ve given it your best shot.

As a side, we are living in an old, small, static van in the garden. Not easy, but MUCH better than living the in house whilst the renovations go on. I honestly hadn't expected how much stripping back would be needed, how much dust, noise and disruption it would cause. The van means we can be onsite, yet have somewhere clean to return to.

We have plumbed in the toilet/water/electrics so its not too bad in the van. If you have rooms of the house which are livable- with plumbing, heating etc then it might be ok. In our case, we had nothing so the van was the best option and something to consider if you get the house. Keep us updated and best of luck OP.

720k!

We have a 4 bed detached and for reference where we live (n Yorks) a new kitchen with fitting, plastering, flooring, plumbing, electrical work is costing approx 20k all in. A new bathroom was 8k. It sounds like you would have to seriously invest 60k? What does the same house in top condition sell for?

£740 is the absolute MAX we could afford and includes every penny we own! We have little ones and would need to live in it as is so want to have a few pounds left over for a cheap and cheerful decorating job!

I’d say in that case, realistically, your max purchase price is about £720-725k, not £740k. “Do it as you go” is fine but with a house in that state you need a few thousand set aside for things that suddenly break and need doing more quickly than planned. There will also be a few things you need to do FAST, particularly to get the electrics done, get a couple of rooms comfortable and stop energy waste.

I'd echo the poster above me. We moved into our house last summer, also in need of a gut job but 80s rather than 60s. We moved in with our 3 year old and newborn, within two weeks the boiler had packed in and we realised come the winter that all the windows need replacing too. Assume that things will go wrong and ensure you have a contingency fund.

Also as a side note you mention the electrics need doing - you'll want to do this before you decorate anywhere as otherwise you'll probably end up with chased walls in your newly decorated rooms that then need painting again anyway?

My house hadn’t been updated for over 25 years and the carpet hadn’t been replaced for 45!
It seemed an absolute money pit but it wasn’t as bad as we feared. There are lots of advantages to not having people messing with things. The walls were all good - no replastering. The kitchen just needed up dating and the bathrooms.
This is my second time of buying a very outdated house and it’s much better than paying £££££ for someone else’s dubious taste.
The advantage of it not being messed about with too much is you’re generally not undoing other peoples mistakes.

The estate agent we sold through ALWAYS reject the first offer on a matter of principle.

So I would maybe offer £730 and then if it is refused you can go to £740.

Good luck! Sounds like a fun project!!

Honestly? I don’t think you’re going to buy the house even at your max given what you’ve said about the vendors ‘not entertaining’ further offers from buyers who have already made bids. Probate sales are often tricky as there can be emotions running high and sometimes conflict between interested parties. And occasionally greed. Although I’m sure it’s a lovely house and possibly a good investment I think your concern is that it is overpriced? I think in that case you need to take the emotion out of your purchase and budget carefully. Consider the value of the house done up. Is that actually £775k? If the answer is yes then you need to work backwards and offer that sum else your mortgage valuation (if needed) won’t match your offer and it isn’t the right investment. You’re in a great position with a FTB under you so ensure that the EA mentions that to them as one of the interested parties may want the money from the sale sooner rather than later! Living with a crappy kitchen/bathroom etc does get wearing and having work done such as a rewire/CH install whilst living in situ is often a false economy (and a pretty miserable experience) as it takes twice as long for contractors trying to work around you living there and not all rooms are available all of the time… do you have the budget for a rental or caravan hire? It’s tricky when you really want a house like this so in your shoes if I was going to go for it I’d get a survey done to justify your offer then write a letter explaining that this is to be your forever home and you’re not a developer (probate vendors are often irrational about potential ‘profit’ they are ‘letting go’ of) detail what you can afford considering a basics overhaul of the necessities and then see what they say. And check the roof. A property in the same family for 70+ years may well need a new one or a major overhaul (I speak from experience here!) A thoughtful approach may well not win over the vendor instantly in round one, but it may stand you in good stead for round two if it is currently overpriced. Good luck and if you want other opinions on the pricing, post a link.

It will have been priced to reflect it's condition. So many buyers don't seem to grasp this!

What’s it priced like compared to other similar properties in the area that don’t need all the work?

If it’s up for £775k, needs £30-£40k worth of work doing on it but houses not needing that work are priced at around £815k then they probably consider it’s a fair asking price, hence why they’ve rejected other offers.

Is there a link you can share?

Usually probate houses are priced to reflect the fact that they need a lot of work, so you can't really start making deductions on that basis. If you think they haven't reduced it sufficiently, though, then I guess that's a different matter. You also need to let go of what the market was like pre-covid - what's relevant is the market you are buying in now. Are there similar properties in the area you could compare prices with? Generally these days houses that need lots of work are priced at market rate minus approx cost of work, ie you don't often get the opportunity to make a lot of money on doing the work and reselling as used to be the case. Also bear in mind that some probate sellers are in no rush to sell so happy to wait for higher offers.

I sold a house that needed some work doing as a probate sale. It was the worst experience ever.

For a start, houses are priced for what you see, not what it could be… so you can’t start taking money off for new kitchen, bathrooms etc, that’s already reflected in the asking price. We had a buyer who fell in love with the house but every week wanted to take more money off for something. Eventually I actually told her to fuck off. I added an extra 50k to our agreed price (she’d taken nearly 150k off the asking price which was clearly priced for a “project” already) and said take it or leave it, all the good will was lost and she was taking the piss. Completely taking advantage of my parents misfortune. Bullying us because she thought she could and knew we just wanted to sell (this was during the time when nothing was selling at all). I lost my patience and decided she wasn’t worth it.

She bought it in the end with the extra 50k and neighbours say she’s never gotten over the bad blood between us over the sale. I also told all the neighbours (of 40 years) what an utter cow she was about the way she treated us, why shouldn’t I ?. She acted abominably. There was nothing business like at all about her, just a cheapskate looking to make some money out of someone’s death.

So yes. It does get emotional. If you can’t afford more than X then just say that. Don’t try to justify a reduction by “kitchen / bathroom / flooring” costs etc. The agent and owner aren’t blind, a house is priced for what you see not what it could be. And if you want to spend more on fittings than perhaps an average estimate that’s your cost not theirs.

Don’t be a dick about it. I’m not saying you are, just don’t be. And remember not only do you have to live with how you’ve treated someone during the sale but you also have to live with the neighbours who may have been fond of your predecessors too.

Just be honest about your situation and they’ll talk. They told the other bidders to do one because they were dicks. I’d have done the same.

Don't leave yourselves without a cushion of about 20k for the unexpected
Walk OP you can't afford it

Where are you? We recently sold our house for 63k over asking, the house we are buying we had to go over asking too (completely different area) so I think in general the property market is mad atm and offers over asking are expected.

@ninkyno

We bought a derelict (empty 8yrs) probate property, no chain either mid 2020- so early covid. Equally in need of complete stripping back, no working kitchen, no heating, artex and an array of BRIGHT colours and textured wall papers in every room from the 60's!

Yup- this is exactly the same except the kitchen, we've been told (hope) is fully functional!

Property was £400,000. We initially offered £300,000. Eventually got it for £380,000. We were cash buyers and also planned to return the home to a family house- and not knock it down for bunglows as an investment. Apparently this is what clinched the deal over other offers of a similar/same amount from mainly buildings wanting to knock it down.

£740 is the absolute MAX we could afford and includes every penny we own! We have little ones and would need to live in it as is so want to have a few pounds left over for a cheap and cheerful decorating job!

If £740 is your absolute max I think you're stretching yourselves too much. The renovations will likely cost more than you think. Why don't you just go for a cheaper house?