Cheeky offers for Reno projects?

[Simonlebonbon]

Hello, I’m wondering if I’m very out of touch here. If you’ve noticed similar recently I’d be interested to hear it.
I’ve been to see a few dooer uppers recently and they seem to be priced without taking into account that they need massive amounts of cash spending on them.
For instance, a house that’s in need of a full renovation including rewire, not a single room that wouldn’t need everything from replastering and new flooring have been priced very similarly to a house that requires no more than a lick of paint and new carpets at your leisure. I’m talking a 5k reduction.
These Renos aren’t selling understandably but surely if a house needs 60k spending on it and the house next door needs nothing, then you’d take 60k off your asking price, not 5k? The longer these houses aren’t selling the more internal damage, more possibilities of squatters or rodents, even more possibility of another market crash. It just seems ludicrous to try selling a dilapidated property for a the same price as a perfectly liveable one in the same street, with the same amount of bedrooms and space but I’m fully prepared to be told I am missing something here

Thank you for the advice. I’m not very forthright and that’s prevented me getting properties I really wanted. Last year I asked the EA if the buyers would consider a 5k reduction to be told no, the house sold 10k under asking and I’m still kicking myself for not saying simply, please give them my offer. I had nothing to lose.

I sent you a PM.
I just wanted to add that I would heed @HellsBalls comment about the economy. I suspect economic reality is going to rear its ugly head later this year and ongoing.

Sometimes there’s a blip with zoopla - our current house valuation is completely wrong and random but I do worry it may put buyers off!!

Ours is based on nothing more than a very crude indexation based on what we paid for it in 1995.

The fact that the house is literally twice the size it was when we bought it and has been immeasurably improved on every objective measure means that will not be the asking price when we sell it. 😂

The EA is legally obliged to pass on any formal offers onto the Seller, even if they are dismissive to the buyers face. When selling, I’ve had my EA, “they made an offer I told them you wouldn’t accept….” nevertheless they were passing it on to me.

So I expect the 5k reduction you offered did get passed on if it was a formal offer which isn’t clear, but the seller was not willing to accept a reduction at that time. A few weeks or months later, they may have been more amenable to a reduction as became more realistic as the property failed to sell at the asking price. Sometimes it’s just a question of timing with getting offers accepted.

What I mean by a formal offer is saying, “I would like to offer x amount” rather than
simply asking the EA’s opinion on whether a particular offer is likely to be accepted or not. It’s not up to them, it’s up to the owner to decide. Though I will add that a good EA will always encourage offers even low ones as it gets the negotiations started. So the EA you had that experience with was obviously not very good at their job.

@Twiglets1 precisely - I've had to remind agents of their obligations before when they scoff at me..!

I am in St Albans @rainingsnoring

Here, listing prices are mainly driven by school catchments.

I have had an offer accepted on a house that needs work (redecorating/rewiring and nothing structural) and this year dropped out of catchment for an outstanding secondary school.

On Rightmove I can see another project house that is 200 metres down the road and firmly in catchment. It is a few hundred sq ft larger and listed for more than 300k more than I will be paying for my prospective new house (I don't need the catchment).

I can't say what this in-catchment house would cost to renovate, but I could imagine given its size that one could spend 200k. My next house would, I believe, cost 50k to do up nicely because it doesn't need any structural alterations but needs rewiring, new carpets, new boiler kitchen cabinets resprayed, tiles replaced, and probably one new bathroom.

So the in-catchment reno project, which has a less modern layout, might cost in total 450k more than mine.

But once you compare this to the cost of putting 3 kids through private school (families who do not secure the outstanding school often go private), it starts to make sense. At least part of that gigantic sum of money would be added to the value of the house instead of fully being sunk into school fees. When the children leave school the house could also be rented at a huge premium - vs what mine would fetch - to families hoping to get into the school.

So I see why people do it and why there is very little discount for renovation projects around here if the school credentials are excellent.

@ohsitdownnextome I understand what you are saying and realise that very high earners in expensive parts of London and the home counties have been making these sort of decisions for years. I'm not sure it will necessarily work out well financially, at least not exactly as you suggest. Most people are only having one or two children now so larger homes are becoming less desirable. Secondly, the desirability of schools changes considerably over 5/10/15 years so there is absolutely no guarantee that the house will retain its premium once the school years are complete. You also need to take account of all the interest paid on the mortgage, which could easily double the figures.

The point I was making above, ignoring what I have just said, is that the current renovation figures may well be double what they were only 5 years ago so that the sums and therefore decisions will be different. It may be that in wealthy parts, people are less careful in doing their sums, due to much higher incomes and that their decision making is different because of their ability to choose private schools, but it is definitely the case, where I look, and apparently where the OP is looking, that these houses are much less desirable, regardless of schools.

Yeah I'm in the NW too and it's the same here! We had a cheeky offer accepted though so I think possibly agents are just putting things on at inflated prices just to see - especially round here where we get a fair bit of investor interest from investors from the SE. The doer uppers simply do not sell though until they're reduced!

We had

Quite a few of my friends round here are wealthy and for them renovating a large house to their exact spec is something they want to do. Round here the builders and estate agents know this. They are selling a luxury lifestyle product. I made a small profit on my own renovation, done in 2019, but quotes I had for prospective extra works this year were insane. 10k to repoint a chimney breast. 1k to paint one room.

A grand to paint a room? Was it being painted in liquid gold? Fuck me 😂

I need to sell a do-er upper, and just the thought of it stresses me out.

I understand that some people are very wealthy/ on extremely high incomes in some areas, St Albans being one of those areas nowadays, and that they are used to being able to buy anything they please. I am suggesting that things may not always be this way and that these sort of financial decisions may change in the future for the reasons given. High valuations for renovation project type homes are clearly holding on in wealthy areas longer than in the rest of the country, where people need to be much more careful in doing their sums but this may not continue.

I've been looking at auction sites today and I was thinking about how bad I felt for those selling doeruppers.
Are you down south? Seems to be a bit more generous from what I've read on this thread with pricing.

Yes the situation only makes sense in areas like mine where school catchment obsession is so rife and parents compare housing costs to independent school costs or commuters compare to zone 3/4 London prices. I looked at a former 2 bed BTL terrace near station with broken windows and broken stairs and horrible garden listed for £600k. Astonishingly it sold for £575k.