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.

I don't think you can afford it either. Even if they accept £720k, it's going to cost more than £20k to fix it up

@SonicBroom

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.

I think this is good advice! It does sound like they won’t go down much.. I think you need to offer the max you can really as I think it sounds only just affordable for you. I think they’ve priced it taking the work into consideration- i don’t think you can take more off tbh! xo

Honestly don’t buy it - it’ll be a money pit. Had a similar situation with our house looked like it needed decorating, hadn’t been updated since the 50s etc.

Everything that could have gone wrong did go wrong. Needed stripped back to brick; plastering; new ceiling inside as old one was found to be collapsing - not budgeted for that; new custom-made windows; new boiler, radiators; had asbestos; we basically ran out of money and are still living with original draughty and awful kitchen and bathroom because we can’t afford new ones … and it needs a new roof. We’ve spent about 40- 60k so far in 5 years and it’s a small 3 bed end of terrace. Still needs another 40 - 60k spent on it depending on if we extend the back or just put velux and new kitchen /bathroom in. Totally immaterial as we can’t afford any of it. Wish we’d never bought it - it’s cured me of ever buying a fixer-upper again … unless you have a huge budget in place to get all the work done - it will always cost more than you think or are quoted - and it sounds like you don’t. We should have offered lower and just accepted it if the buyers wouldn’t accept. They were cunts anyway; really horrible to deal with. 5 years ago they wanted 380 which was a joke considering the state of the house. We paid 330 in the end.

Regret, honestly. If we could afford to finish doing it up we’d probably just about scrape our money back as property prices (by the sea; can commute to London) are crazy here now and these houses are now worth upwards of 450. Still not worth the utter pissed offness I feel every time I have to set foot in our crappy kitchen and bathroom.

If it's 775k and you have 740k max I'd start looking at a search criteria for projects of 550-700k.

Probate is always tricky you rarely get a bargain, as it's sometimes split 2/3/4 ways so each party will want the best price.

Estate agents price with the work that needs doing taken into account (mostly).

I'd honestly focus on a different search and if this one is still around in 6 months maybe revisit the price.

Whatever the quotes are for the renovations add an extra £5-10k. We only had about £3k as a contingency plan - nowhere near enough! Those jobs will probably never get done.

Offer what you can afford, they either accept or not, we can’t guess their mindset as we don’t know them personally. There is no magic formula.

I’d not be keen to buy a doer upper that I’ve no money to do up. That’s a recipe for disaster. Go in at 725, with an idea of going up to your max of 740, which they might let it go for. But again, if it leaves you no money to do the work, I am not sure it’s a good idea.

What it was worth two years ago before the pandemic is irrelevant.

For a start, houses are priced for what you see, not what it could be

I think the op likely knows this, but she’s looking for reasons to justify why she can offer less. I doubt anyone thinks a doer upper is priced at the finished article.

People always look for reasons to justify an offer instead of just saying I can’t afford yout house, but can I have it anyway.

Offer 730, you can go up 10.
If they're not budging you can't afford it unfortunately.

You can’t afford a house of it needs a total renovation and you are purchasing at the top of your budget. Do you know how much renovations now cost? We don’t know the size of the house but if it’s a 3-4 bed family home over 1700sq ft, then a total renovation will set you back hundreds of thousands. You need that in cash. Our 3 bed 1900sq ft home is costing us £300k for a total renovation (includes an extension dormer upstairs) in the Home Counties for a high end finish.
Look at how much a fully renovated house in your area is selling for. Then you can work out how much money you are likely to need for renovations and add on 20% for the rising cost of materials in the process

I really don't follow how you think you can buy a house worth 775k with your max pot of 740k and then afford to do it up?
You need to seriously work out the renovation costs for, rewiring, heating system and boiler, windows, roof repairs, kitchen, bathrooms, plastering, flooring etc.
On the info you've given I can't fathom out how you can do thus when you have no budget!
It will always cost more than you think and with current price rises considerably more.
Unfortunately thus will likely become a long protracted project if you don't at least have the funds for renovation.
Walk away, surely the house is currently priced for it's present condition?

I don’t think you can afford this house. Where I live houses are going for more that year asking price and in your case I’m surprised it hadn’t been snapped up by a builder. I was in a similar position and looked at what neighbouring house that had had been done up were valued on Zoopla etc -saw that ‘mine’ was massively undervalued on that basis snd offered above the asking price. Mine wasn’t the highest but the vendor accepted as mine was the only cash offer -no chain.

Offer £700

OP, which area are you in. It’s impossible to answer this question without knowing the location. Maybe the house will be worth £1 million when done up so we’ll worth offering your top budget. Maybe the location simply doesn’t warrant that kind of a house at the budget, in which case, run. It’s a piece of a string question.
On another note, do budget £150k+ for a house that hasn’t been touched since the 50s.

I am sorry but I also don't think you can afford this unless you out a low offer in (£720 max)

You can’t afford it. Not only is your absolute max way below asking, these places need serious work to get up to standard and even if you do the bare minimum you need a bit of a buffer incase the boiler goes / roof leaks etc etc

You can’t afford it.

If it's a probate property it will be market value so doubt it will drop much, also how much have you put aside for renovations

It has presumably been priced in the context of the work that needs doing, and houses here are still going at or above asking price.

Be realistic and offer what you can actually afford (and leave contingency for wiring, there may be some damp, etc).

Offer 715 and don’t commit to going to the max you can afford, if they reject go to 720 but no further. Make sure you state your position / chain with your house and that you stand ready to appoint solicitors ASAP.

OP are you happy to live in it for a couple of years until you can start to do it up? If not, don’t buy it, you can’t afford it. We’ve recently done up a house (no extension, but everything changed) and we’ve spent 100k over about 3 years. Whatever you think it will cost, it costs more!!

Without knowing anything about the area and how popular the house might be and what figure the sellers have in their mind......I'm going to say offer £730k.

Do you have separate savings for the stamp duty, legal fees, etc? Just slightly worried about the every last penny comment!

You can't afford it.

We bought a house built in the early 80s that hadn't been touched since. It was liveable but there was definitely some things that I didn't really think about.
Bathrooms- both were original with a pathetic shower off the taps. Could barely wash my hair!
Boiler- old and noisy and needs replacing. It cuts out sometimes as it can't cope!
Windows- all needed replacing
Kitchen- hideous but functional.
Decor - every room has needed plastering/new skirting/carpets etc

I would say our expenditure so far with plastering, flooring, decorating, ensuite, windows is at least 30k.
We still need to do the boiler, kitchen and bathroom.
You will need at least 40k to spend. I would suggest you test the water pressure and heating, especially with little ones

I’ve just sold probate property for 415
I put it on at 395 to take into account the work needed doing would be around 40k
I had lots of offers over the amount and it sold same day
A refurbished house to a decent spec would easily sell for 500k so my buyers got a good deal