Advice on buying a fully renovated house

[PeppaSuzy]

We are seriously considering to buy a fully renovated house. The EA told us that the vendor bought this 3-room Victorian house at around 200k two years ago, refurnished everything very nicely with good design ideas, made a dormer loft conversion and then put in the market and now selling it at 550k, and suspect that he didn't spend much time living there. The size and location of the house is perfect for us. The other similar houses selling nearby in the last few months was around 400k, so apparently the vendor is putting all the building costs in it.

So our concern is whether the work is good enough for us to pay such a high price. We were told that we would receive various certificates. Certainly we will have a level 3 survey on this but is that well covered in particular in the areas we can't see it? Or is there anything else we can get some more comfort from the EA or vendor?

Also we wonder how much we should make an offer. We are cash buyer and chain-free so in a good position to proceed. We are happy to make an offer but the asking price is a bit beyond our budget. Guess there won't be a strong interest towards this house as it will be far over the any lender's valuation. In our area, good houses are gone in a week or two but there are a few others remain in the market for months.

Thank you and certainly appreciate any idea about this.

What condition are the houses selling for £400k in? It’s not really for you to cover the vendors building cost if they have overspent.

No way would I pay £450k for a house that was £200k 2 years ago. The person who brought that likely did all the work themselves because they could and they only had to pay for materials, therefore, their labour was free.

thats quite an assumption to jump to! We’re spending £100k+ on renovations, and between that and general (mad) price increases where we are, our house would probably sell for £200k more than it cost us. The only work we’re doing ourselves will be the painting

It depends - how much do you like the finish and how much do you value not having to do a project?

if you love it and plan on staying there for a while (I.e. you’re not trying to make money on it) I wouldn’t under estimate being able to move in and just live in it.

it’s an absolute nightmare doing a project and costs seem to just keep increasing.

Buying a renovated house is great if you hate DIY and can't face the upheaval of a project. DS1 recently did this.
However it still needs to be a reasonable price. Unless the other houses that sold for £400k were derelict it sounds over priced.

We did this, cash buyer. Ours was a bit more of a bargain as the market was slower. It was completely gutted and rebuilt.

But it’s been 100% great. Nothing to change, everything new, nothing to worry about.

I would check if the work if only Cosmetic. If it included new wiring and windows and the like then go for it.

It's irrelevant how much the owner paid and when (and whether they did the work themselves, that's just bizarre). What matters is the current house prices in the area. If the 400k ones don't have a dormer conversion and aren't renovated to a high standard, then this house could absolutely be worth 150k more, providing it's not above the ceiling price of the immediate area. Especially at the moment when renovation work is so expensive!

As a PP said, I'd check for work on electrics, plumbing/heating, any insulation work. The stuff you can't necessarily see, but that can cause massive upheaval if you have to do it after you buy. And unfortunately stuff that even a proper survey won't be able to pick up. Make the offer conditional on appropriate certificates/proof of installation being available, because you don't want to pay over the odds for someone's DIY bodging.

I envy you - have been living in a 'project' for three years now, and would LOVE a properly done up property. Worth it if you can afford it.

Thanks all for your view here. Very helpful indeed.

There will be a lot of work for the nearby 400k ones. For the one we are looking into, all wiring and plumbing stuff should be new. The vendor certainly did something (say improving the garden) we consider as good-to-have but would not be our top priority if we were the one to do it. If all the work are great then I can see why the vendor would put the additional 150k into the cost especially under the current environment. But that's a big if and it's difficult to check whether they are up to standard. So we are still debating whether or how much we should take the risk.

I think the quality of the finish and fittings is telling. It's unlikely someone will bodge things then take the time and spend £££ for a perfect finish.

I'm usually of the mindset to not spend money on other people's tastes, but in the current climate it's generally not cost effective to get the work done yourself. It sounds as if you like all the work done, so that's a bonus.

We bought a house where the previous owner had done it up. Not a renovation as such, but new bathrooms and kitchen etc. over the years we have been told again and again "well whoever did this didn't do a good job" for eg our shower tray drained upwards.

Still glad we bought it though, but just wanted to share.

Be very careful about what they did and didn't do - certificates for rewiring, boiler installation, windows etc. The big, disruptive, behind the scenes things are the important ones. It's relatively easy to change the decor!

I've done both - bought a newly renovated house that had been a repossession. Later on, bought a house with my now DH that needed the work doing to it. I definitely overpaid on the renovated house and made some mistakes in buying it - they hadn't done major stuff so plumbing, heating and wiring all the same. Not a problem at that point but the boiler was elderly and I had to budget for that needing replacing and if I'd stayed there for many more years would have needed more doing. They'd put new carpets throughout which looked nice but turned out to be poor quality and didn't stand up to much wear and tear at all. They'd put in a new kitchen. Again, it looked nice, but one cupboard got mould as they'd blocked up an air brick. There was a space to put a fridge but there wasn't a plug socket in it!

For my situation (single, working away a lot) at that point it made sense as I wouldn't have had the time or spare cash to get the work done. However, we did find it preferable to buy the house that needed renovating. However we could afford to do the work and had a great builder! It meant everything was done to our taste and lifestyle eg plug sockets and lighting where it worked for us.

We're in the middle of buying again and decided against one we viewed that had been renovated as it just wasn't to our taste. We're buying another project house!

agree with ridingmybike - if these are new and they have the certificates: rewiring, boiler installation, windows, new kitchen, bathroom. Then yes it's a bargain. They'll be crappy things that you'd do differently but 95% will be oK.

If no certs then not worth it.

Of course it matters who did the work. My parents are doer-uppers. I would NOT want to buy one of their efforts !

It ultimately depends on how much the house is worth TO YOU. A house will only sell for what someone’s willing to pay, no matter what an estate agent or surveyor says.

To put costs into perspective, we’ve rewired our house, and replaced the windows, doors and boilers, amd that alone has cost £40k, but the only visible thing is the new windows and doors

Of course it matters who did the work.

If this is in response to my earlier comment, I was replying to the poster who had decided the vendor had done all the work himself and therefore OP shouldn't be paying as much. I doubt a diyer would take on a loft conversion. Well I hope not anyway 😨

Guess there won't be a strong interest towards this house as it will be far over the any lender's valuation

it is the valuation that matters here. You pay what the house would get on the market - not what it's initial value is plus the labour put into it by the owner. Also you don't want to own the most expensive house on the street - where all the other houses are similar if unrenovated.

We did a big renovation to our house about 6 years ago - new electrics, plumbing, heating, bathrooms, windows, kitchen, etc etc. If I put it on the market I would ask for what renovated houses of its type in the neighbourhood are going for not what it was worth plus what we paid for the renovations.

My parents bought a fully-renovated family home (Victorian, large) when I was younger. It was wonderful! Nothing went wrong for ten years and it was so lovely to move into. I highly recommend it. I, on the other hand, have always bought wrecks and done the renovation. I think the amount you pay as a single renovator compared to the amount a developer with trade connections etc pays is vastly different.

Consider the value of your own time and comfort as part of your sums as well as the cost of the work, and you might well think it is worth it.

Thats going on the basis that you do not value someone's labour. We are two years into renovating and every second of free time is spent on the house. Every weekend/every evening/every bank holiday.

It might be 'free' in terms of us not having to pay someone, but it has all been done to improve our house and add value. Of course people who improve their house see it go up in value, whether they've paid someone to do the work or not.

If it has been fully renovated then it is worth the same as a new build, and is probably built better and bigger rooms.
If its been diy'd then it would be quite concerning. Look very closely at the finishes etc.
I would estimate a full back to brick refurb would cost 100k or more on even a modest 3bed semi these days
But again it's only worth what the market says its worth, and what it's worth to you. If its absolutely perfect and all to your taste then I would go for it, but maybe offer around the 500k mark

Check anything you can yourself in advance eg new windows should be on the FENSA site any electrical work even things in kitchen (and of course reworking) should be on checkmynotification.

Unfortunately building regulations are not online I wish they were. One house we saw the person hadn’t got permissions for moving kitchens, knocked down walls even replaced roof in last 2 years.

We bought a fully renovated house 4 years ago. It had been purchased at rock bottom price, fully gutted and refurbished to a very high standard. We wanted exactly this and had no time or energy or patience for a project house. We did negotiate the asking price but the market was slower then. We got guarantees for the bifold, flat roofs, all the wiring, plumbing, floorboards, boiler, tank - all new with documents. Every single tradesperson who has worked on the house since has complimented the high spec of work done and quality of materials used. We are so glad we paid against the odds for the house. A year later the price we paid was considered a steal and others were buying houses which were part refurbished for the same price.
For reference the buyer asked for 80% markup on his purchase price. We negotiated it down to 70%. For us it's been worth it but we appreciate that it's down to luck to have a genuine builder who has the right intentions.

In your position I wouldn't look at the price he paid to buy the house. Instead see what can you get for £550k or £525k in that area/street and then compare with this house.

Sorry for the drip feeding. We got a structural survey done (100 year old house) which gave us confidence in the quality of work.

Again thanks for all the input. Glad to see a lot of useful advice and also some positive stories. Hope this could be the same!

We are with young children and not good at DIY so a house which is almost ready to move in can save us a lot of time and effort to deal with materials, cost, builders etc. So this is very attractive for us even if we may need to take some risk of some work may not be up to standard - a risk that would be reflected in our bidding price.

We were told that certificates of building control completion, electrical, gas and window FENSA would be available upon completion. Hope all these alongside with a structural survey should be good enough to give us the confidence.

We're in the middle of buying now and have seen all those certificates already for our purchase and we haven't exchanged yet.

You need to see them before exchange to make sure everything's in order before you commit money to the purchase.