Buyer pulled out, now what? Auction?

[AhBiscuits]

Selling my dad's old house. It was built in the 60s and requires extensive renovation. Buyer has pulled out following a very thorough survey. They have stated it identified the following issues:-
-damp
-roofing and structural issues
-asbestos issues
-electrics, plumbing, and heating are outdated and may pose safety risks
-signs of movement and floor instability

They said it's too much work for them.

I have reached out to their solicitor with an offer to buy a copy of the survey from them. They don't need it now and they might be happy to get some of the money back.

What do we do now? Just try again? I don't know anything about auctions, is it worth considering?

Well first off some of that sounds like utter rubbish from the buyer.

Surveys don't test water, electrics, gas etc... those are separate tests by specialist.

ALL houses from last century have asbestos risk (that also need a wholly separate test)

Almost all houses will have a damp reading, they will always suggest a further test with a damp specialist as all they do is stick a damp meter on the wall (you can do this, hell we built them in year 7 as part of the curriculum).

The only things that are possible red issues from a survey are roof and movement/floor which you can look into yourself. The survey will say to seek a structural engineer, you don't need to buy it to know that. The other things a survey does NOT confirm they are just standard general advisories on all surveys.

Thanks. It's reassuring that it might not be quite as doom and gloom as it first appeared.

The survey was pretty extensive and took 3 hours. We always knew it was going to be a big project for someone, and it's priced accordingly.

I was surprised by the finding on damp as I cannot recall ever seeing signs of damp anywhere and my dad owned it since 1987.

How long did it take to find this buyer?

About 3 months. We had a slow but steady stream of viewings.

I’d probably do a price reduction before going to auction as long as you’re ok with waiting for a little bit longer.

It took 12 months to sell my mum's house, which was also a renovation project - although the roof was OK. You just need the right person and clearly the previous person wasn't it! We sold to an architect who completely revamped the inside of the property as well as putting in new heating, new electrics, 2 new bathrooms, and a new kitchen.
Do you need to sell urgently or can you hang on and see how it goes over the summer? I suppose part of the problem is that renovation costs are so expensive now that it's not an option for lots of people.

We don't have an urgent need to sell.
I think it's a good shout to see how things go over the summer and reassess if no luck after that.

I would reduce the asking price and be very upfront about the nature of the work needing to be done. Work is very expensive and very disruptive so will put many people off. At least if any new potential buyers have some idea of what is involved, they can make an informed decision and would be (hopefully) less at risk of pulling out later on.

I’m still looking for the damp in my house 10 years later. I suspect it was to do with the 8 dogs they had.

Despite the lack of urgency, I would be inclined to speed things along if I were you. The Spring is historically the best selling season and this Spring has been a bit of a damp squib metaphorically speaking in many areas. The Summer tends to be less good with lots of people on holiday, busy with their children, etc. A sale later in the year will drag on into Autumn/Winter and problems with an unoccupied house are more likely to happen then. Apart from that, I think we will see continued deterioration in the economy, which is likely to reduce your pool of potential buyers.
I would reduce it, review the photographs and listing, add any additional information and hope to find another interested party now if possible.

If you reduce it to the right price and you get your agent to suss out the buyer - that they know it's a renovation job and is up for it, and won't faff you around with survey findings - then you'll find someone else in a fortnight. Has to be a competitive price.

With an auction you will doubtless give more money away.

Get yourself a thorough survey done so you know the scale of each problem (is it a tiny bit of localised damp, or rising damp everywhere).

Whatever you do, do it quickly, as the condition will get worse quickly if you're going into Autumn without having completed.

Could it be damp because no one is living in it and so the heating is off and it isn't being aired?

Get it back on the market, with a price reduction to better reflect amount of work required.

Lots of ppl are after doer uppers; you just haven't found that buyer yet!

Unfortunately, I don't think that is the case anymore as the cost of work has shot up so much and house prices having fallen in many areas since late 2022.

I agree with you about the reduction and re-listing promptly though. That's likely to achieve a better sale price than an auction, as long as the reduction is large enough and the buyers are given all available information.

Thanks everyone.
It is already priced as a project, but have been discussing with my siblings and I think we'll get it back on at 15k lower and see how we go. The buyers were a bit clueless about what they were taking on I think.

@AhBiscuits I have a different view to what appears to be the consensus here. I would get your own full building survey done, an electrical installation condition report, and a gas safety certificate. Once you have those, you will essentially have a full list of items. If you then felt so inclined, you could get quotes for any major work, then get an idea of what the house would be worth in good condition. Then you will know how much to reduce by.

You can offer all of those to potential buyers to add a bit of flavour, and possibly reduce by a further amount to sell faster.

Ultimately, a house is only worth what someone is prepared to pay, but I think you've been unlucky with your initial buyer. Someone serious about a project would not be put off by the work you have stated and would be trying to negotiate the price further.

Keep it on the market, maybe reduce the price a bit and hope you get some more clued up buyers.

If you do eventually decide to auction, only use traditional auction. Avoid ‘modern method of auction’ like the plague.

When we bought a house there was a last minute hiccup for ‘damp’. Turned out there had no money to have heating on all winter. A month of blasting the heating and there was no damp. It was literally condensation as they were only switching it on for viewings/ survey etc.

Whilst they don’t test the utilities, they will make recommendations. It’s also entirely possible the buyers already knew they were outdated and needed replacing.

Don’t be disheartened, pop it back on the market and there’ll be someone else who will take it on. It happens all the time.

The utilities and roof should not have been a surprise to anyone, we always knew they would need replacing.
The buyers only actually viewed the property once and fairly briefly. They said they were up for a project, but maybe they were thinking more new kitchen and splash a bit of paint around.

You were unlucky with that unrealistic buyer. A 15 k reduction will hopefully move things on quickly.

Were they first time buyers? They seem to be both clueless and far too precious now. Surveyors don't help - there's so much arse covering in their reports, that they're not worth the paper they're written on. My buyer pulled out, allegedly because of the survey results, which they sent me a copy of. I was actually pleasantly surprised by the results, which weren't bad at all! There's one potential issue which is blatantly obvious when you view the property, but the rest was complete and utter tosh.

Keep the property on the market, ask for any 'sold' sign to be replaced and ask the estate agent to get it relisted on rightmove etc as a new property (I didn't know this was possible, but mine did it without asking).

Everything others have said is true. Surveyors simply don't cover some of the issues on their list thoroughly, and they may say "there is evidence of..." to cover themselves - I think that an experienced buyer would take most of this in their stride.
We've normally bought houses that were renovation projects of varying levels and would expect a survey like this, so provided the price has been set realistically by your agent these aspects should not be a problem.
Our last purchase was a sale that sounds similar to yours, no pressure for the sellers to sell but the price was realistic. They'd actually spent money redecorating and putting in cheap carpet but this didn't affect us as we planned a complete renovation back to the brickwork anyway. We have safe asbestos in the block as is normal in many flats because of the fire risk, and we knew that the plumbing and electrics would need work.
There are so many buyers out there who expect both a low price and a house that just needs kitchen, bathroom and redecoration, but this isn't realistic. I'm pleased that you don't need to sell in a hurry, it puts so much pressure on buyers if they need to pay IHT.
I would expect that you'll have buyers falling over themselves to buy your property once the market picks up again, the best of luck to you.

And I wouldn't to to auction unless I absolutely had to, particularly in the current market.