Offer on 400k house

[BigBabySmallMum]

I want to put an offer in on a house
It was up for 425k but was lowered to 400k recently
how much do I offer?

its the right size for us but needs gutting completely so it’s a lot of work, I don’t mind doing it but don’t want to pay more than I need to as need to keep money back for doing it up..
all thoughts and advice welcome, I don’t know what to do!

thanks 😊

I'd go in at £340,000

It depends on what it's worth. What are other houses selling for in your area?

Impossible to answer

and any answer will be completely blind

As they've already reduced it I'd imagine they wouldn't accept anything too low unless they didn't have many others interested. Maybe go a bit under the asking price especially as it needs work.

The house opposite mine was up for 425,000, now 400,000. Realistically it was worth 350,000 but it’s now been up for sale for 6 months, so the value has decreased.

Do you think they’re cheeky sods and they’re trying to sell the house for more than it’s worth or do you think it’s a fair price?

In my hunting area, a full renovated and downstairs extended house just came up for 550.
Last sold in 2019 for 280. They’ve probably spent 120 - 150k on it.
If you spend say 100k on a renovation, would it be worth 500-550 afterwards? If not, lower your offer until it makes sense.
Don’t forget every builder in a 10 mile radius has looked and discounted it as too expensive to renovate and sell at a profit.

I partially agree with @C4tastrophe. You don't want to renovate it above its eventual market value, but builders want to make a significant profit, so the fact they haven't snapped it up doesn't mean it's not worth it for someone to live in who isn't looking for an immediate return.
Figure out what a recently renovated house has sold for recently, guesstimate the cost of the work needed, then offer that to start.

thanks so much for all your replies.
I went in 25 under and they just said no, no counter offer, no indication that they’ll go lower so I think they want the asking price..
they have viewings next week so I don’t know whether to go to the full asking price and say no more viewings or chance that no one else will want it and hold out… it’s so hard to know!! Any thoughts or experiences with this
thanks so much for all your replies !!
I’m so nervous!

It’s impossible to advise

added to which, we have no idea what your position is in and how you are as a potential buyer?

If it's in enough of a state to need totally gutting then they'll have already valued it with that in mind. We're mid-renovation now after buying a house in quite a state earlier this year and paid slightly over the asking price. I know the market is dropping now - how much would it be on for if it was fully done up?

Is your renovation on track price wise? Or more expensive/taking longer?

It should be priced for the condition it’s in. Not what it’s worth renovated, which is what you are doing, pricing it to include all renovations.

On track. We got the builder to do quote as soon as we completed and started work in October. It's expensive, yes, compared to the last time we did this over a decade ago! But nothing to compare it to from, say, a year or two ago.

Builder was able to start work a few weeks earlier than we expected in the end as I think someone else had cancelled.

You can go in just below and see what they say? Say £390? Or go in at £400 and then if the survey comes back with some
mega issues renegotiate.

This really depends how much you like it.

You could say your offer of £375k is on the table until 12:00 tomorrow and it's as far as you are prepared to go. And that you have viewings booked for the weekend yourselves. Book in some more viewings with the same agent, perhaps even for houses that don't need the work and say you are in two minds about buying a fixer upper in the current climate of rising costs of materials and trades etc. Let them see that you have options too.

Only if all this is actually what the prepared to do.

Otherwise it’s just bluff

You need to make an educated guess on how much work on it might cost. One person's needs totally gutting is another person's cosmetic improvements plus a new kitchen. So then you see how much the purchase plus the building and other costs is and decided where you think the value lies, comparing with any other properties you have viewed/sold locally. It's more important how much it is worth to you than thinking or second guessing the vendors or other buyers.

@BigBabySmallMum what do you mean by gutting? Is it new bathroom/kitchen/heating system/rewire/replastering/drive etc?
Unless it already appears very ‘cheap’ compared to other sales, they are most likely still 50k over priced and should have accepted your 375 offer.

Hi all
thanks so much for your advice, it’s hard for me as I don’t have many people to ask about this.
when I say gutting i mean it needs whole new insides as in everything you can see need changing- new kitchen, 3 new bathrooms, tiles, paint, all new doors, all new floors and carpets throughout, new fireplace and there’s some plaster damaged too, even garden needs doing- grass is all weeds and need fencing fixed or replaced- so I need to budget for this. 😬
Im assuming plumbing and wiring will be fine, it was just obviously not cared for by the last owners but maybe they can’t see this. Tbh it’s dirty too but if everything is going to be changed that doesn’t matter to me..
I’ve not offered more as I’m going to think about it til tomorrow
I might book a viewing at a similar house on the other side of town with same estate agents to see what happens then
I’m sad they didn’t accept, has anyone had an offer refused then accepted?
the didn’t even counter offer for me 😞

The last house we bought we had our third offer accepted.

I've had vendors come back to me 2 weeks later and accept. But I literally offered my maximum budget and said to let me know if they changed their minds over the next couple of weeks.

I think it's easier when you are being honest - I am very upfront these days. I tend to break down my offer based on what I know (like you - that it needs cosmetic upgrades) but that my offer doesn't include anything in a survey I could not predict, like a roof or wiring or subsistence. So I am very open that I am not trying to offer high and then come in further down the line to negotiate. I really hate that tactic.

I have offered on a lot of properties in my time and would ultimately caveat that if you love the house and think you want to live there for a long time, then 5 or 10k is unlikely to make much difference. I have lost houses I loved by trying too hard to strike a deal and losing out to other buyers.

@BigBabySmallMum the vendors may well need to achieve a certain amount in order to move on in their chain. If they haven't counter offered then I think you're unlikely to get the house for much less than asking price. Realistically, you've come in at 50k below what the property was originally listed for and that's a huge jump down.

Have a look at recent sold prices in the area and what else is available. If it needs a lot of work I doubt they'll relinquish 25k or similar to allow you the budget to do it, when they never did it themselves. Plus, at the point of valuation, it should be priced with the current condition of the property in mind.

@BigBabySmallMum sounds like tens of thousands of work then, plus many months or years of disruption. Would need to be the perfect property for that hassle.

You also cannot assume the plumbing and electrics are good. I’m amazed by the number of ‘renovated’ houses that have a new kitchen and bathroom, everything painted grey, but a closer look reveals only one power point per bedroom, or one double in the lounge etc.

If the property isn’t being marketed as a doer upper then the vendors won’t necessarily see the house the same way you do. In their eyes if a light switch works it doesn’t mean it needs a rewire…a bit of damp plaster? Just patch it up!

we were in your position 5 years ago, house originally £775k, then £750k then £725k then £695k then £650k. We went in at £580k due to the work needed but finally negotiated to £625k. The vendors were incensed their house wasn’t worth what they thought it was, fought all the way during the selling process, pain in the arse on moving day…the usual tricks. Even now I think the house may be worth £775k with renovations half way complete.

The price reduction probably stings a bit for them, maybe wait till the viewings are done so they’ve got feedback off other people and offer £382k?

Agree, needing gutting here could be mainly cosmetic, without a link it’s hard to see if this is untouched from the 60s, unfunctionable or just not your taste.