Selling extended house for less than purchase price: how will buyers react?

[Spotteddaisy]

Grateful for any advice please re house selling.
We are not strangers to house selling as have moved 5 times in the last 15 years, (but in the same area) We have always made a small profit on the house sales to put towards the new property.

In Autumn 2023 we moved to Dorset, 10 mins from the coast.
Detached 4 bedroom house with a plot of just under an acre. In a lovely village, good schools etc nearby. Previously lived in Hampshire.

We have extended the house by rejigging the layout and adding a big dining/family room downstairs. We've made other improvements too like insulation, adding solar panels etc.
Had a couple of estate agents out last year to value it who said to market at £850k. But we have been on the market since last June with no offers at all. We have now reduced the price by £100k and changed agents at the end of last year.

We have had a few more viewings with this agent but still no offers. Which obviously means it's the price. So we asked our agent what we can do as we're aware that properties still on the market after 9 months don't look good.

He said we should drop the price to £695k. We are not sure what to think about this (my DH is fuming)as we bought the house for more than that 2.5 years ago and have spent a substantial amount on the extension and improvements. Surely anyone who has done their homework and looked up house prices etc will see that we bought it for more then added an extension so to then list it for less just makes it look really dodgy? I don't think the market has decreased so much in less than 3 years that we would have to list our (bigger, improved) house for less than we bought it for?! I know that ultimately no one will care what we've spend on it but the fact that it's now bigger than it was must count for something?

We really aren't enjoying it here and now need to move to somewhere cheaper and to be back nearer to family. This has all been a massive costly mistake and I feel so guilty. The fact that we could end up in negative equity is just stressing me out even more. We've never made a loss on a house and ploughed all of our savings into this one. We were so full of hope when we moved here, but it's all just been awful.

As a potential buyer what would people think about a house being listed at less than it sold for not even 3 years ago, even after its been extended?

I think it’s gorgeous and I love the large garden. I wouldn’t sell any of it off. Without pp you would get next to nothing for it and with pp you might get a house too close etc detracting from the appeal of your own house.

The only things I can think of to improve it would be fruit trees (which I love myself), and getting planning for a pool. I myself wouldn’t want a pool but some people might and just having planning for that would perhaps attract people for whom 750k is very possible.

I think you’ve spent more than the house can be worth. Everything has a ceiling price. You’ve bought the most expensive house in the location, all the others sold nearby are in the £300/400ks. It’s now pretty bottom heavy. The garden is big but has nothing it it. Anyone wanting a large garden has to start from scratch. I don’t understand how people could have all that and not put in some shrubs and trees.

Its a not got any old world charm that houses have in Dorset but its not a new build anymore. It’s a bit white. The decor isn’t giving any country house charm.

Weymouth wouldn’t be my choice if buying in Dorset, I’d go west.

Someone up thread had an idea of getting planning to build another house or two in the grounds. I’d second that. You could reverse your loses.

I think £750k is a good price, I think it’s just needing the buyer to co e along if that makes sense. So if you can hold out, I would.

In all honesty, I think you’ve over extended the downstairs. Not much you can do about that now but it feels too big for the upstairs.

plus only one bathroom? I can see there are 2 other toilets but for a 4 bed house, especially such a large one, one bathroom is really insufficient.
I’d expect two (or possibly even three as a nice bonus) as the mudroom could easily have been a wet room for dogs or humans.

if it was an area I was looking that would be the off putting factor, church / graveyard wouldn’t bother me.

i think k of you don’t want to make a loss on it, you’ll have to take if off the market, suck up putting in an ensuite and then resist. Yes others could do this but why would they pay you a premium to have to do it themselves.

or you leave as is and as suggested, get plans and permission for parcelling up the land to build another couple of houses on it and sell it that way.
you could make a fortune but will have to invest in the short term.

Thank you, its good to hear honest feedback.

The new builds are at the top of the garden by the entrance to the drive and then there's a big pond down the side with some more new houses behind it. The other side of the house is the church and graveyard and then the gardens of the houses from main street in the village back onto the length of the front garden.

In the summer our big tree blocks out a lot of the newbuild view.

The newbuilds were there before we moved in.

"All the steps' are part of the side entrance to the smallest part of the garden that lead to a "secret" path that goes to the church and the rest of the village. They are not the main entrance to the property.

Street view doesn't work as the access to the house is up a little road off the main street.

I'm confused by the grey comment. The hall and landing used to be painted grey and I repainted them in a different colour as I don't really like grey. The only grey we have is the carpet in the snug which was there when we moved in. Our stairs and landing carpet are more silvery/oatmeal. My daughter's bedroom has a darker silvery carpet. The kitchen and dining area have white flooring. There's grey flooring in the bathroom but again we inherited that.

The fireplaces are marble. Again there when we moved in. I don't love them but don't want to rip them out either. But I appreciate they aren't to everyone's taste.

Look it’s absolutely lovely but you’re trying to sell in a DREADFUL market.

Unless where you’re moving is DRASTICALLY cheaper I’d stick it out longer til the war is over, till it’s a less volatile market. On the radio yesterday they were talking so much about the war is going to affect interest rates this year so I’d take it off and bang it back on at £850 in the autumn.

it’s genuinely lovely 🥰

Thank you everyone for your insight and comments. Lots of food for thought.

We've looked into selling the land and had developers contact us but I think there's something in the original deeds about the access road only being for one dwelling.

We are looking into putting in another shower room depending on what the people who want to view it again say.

We want to sell and move ASAP for financial reasons and due to family issues but I will update if/when we sell.

Who owns the access road?
I like the house, but a couple more trees strategically planted might help.

I think I'd be tempted to take it off the market at the moment. Retake photos in the late spring when all the leaves are on the trees, the garden is looking its best etc. Possibly put an extra shower in so that if people are filtering for "2 bathrooms " your house comes up on their search.

But in the meantime throw yourselves into life in Dorset and really give it a chance. Go fishing and crabbing with the kids. Maybe try windsurfing if you're brave or sailing. Do some lovely walks. Go fossil hunting. Have a bbq on the beach. Invite friends and family to stay. If you give it everything and still want to move then re-list at the end of the summer.

My house is of a similar size and I have slightly more out door space although mine is more of a woodland property than open space like yours. I would also describe my property as niche as it’s not for everyone, I too have planning permission for an extension for annex .
I put it on the market last May, I had an initial burst of viewers then nothing but recently I have had a couple of more viewers but no offers.

Last week I decided to remove it from the open market as I am not willing to make a financial loss, and the way that the world is at the moment, I am aware that 22 different mortgage options were withdrawn last week making getting a mortgage more of a challenge for buyers.
I also refuse to reduce the price as it would give me no room to negotiate if someone made a cheeky offer.

I absolutely would not put myself in a negative equity situation especially when pension has been used as this will never be recovered and may cause resentment in the future.
You say you want to move somewhere cheaper but surely by putting yourself into a negative equity position it’s not going to save you anything, in fact in the long run, cost you a small fortune.

It's a difficult one -

If you’re thinking of money and investment and moving is not a matter of life and death, then I would stick it out for however long it takes at the current price.
It’s a buyers market just now and a turbulent one at that.

However, money is not everything!
If you are desperately unhappy and can’t stick it out, take the loss, but that will potentially have further impact on your future. Hopefully, if your happy and content then it’s a good impact regardless of the financial loss.

Good luck with whatever you choose to do.

@Spotteddaisy when are the people who might be interested coming back to view? Hang in there, they might be your buyers! And if they offer low don't cave immediately- I think it's a lovely house and no-one is going to view twice unless they want that massive garden, and that makes it worth it. Hold your nerve!

And come back and tell us what they say.
I was puzzled by the grey comment too, there's hardly any actual grey! 😂There's some pale silvery carpets and some lovely warm looking wood or laminate floors, not all grey as that poster seemed to think.
And thst amount of blank-slate garden space is to die for, IMHO. Best of luck! 🤞

Bear in mind that if you move somewhere of similar size, perhaps the price of the new house will have been reduced over recent years too, so you would be even overall and able to take the hit on yours?

Buyers properly doing their homework will also notice that borrowing costs have jumped a lot since you bought, that is a main driver of house values.

It is nowhere near a buyers market, houses are still far too expensive and mortgage rates are rising, mortgage approvals are at about half peak numbers.In a true buyers market we would see transactions rising not falling.

Yes, the "race for space", "work from home forever" craze was certainly a bit odd, a lot of people don"t seem to have thought it through very well, the stamp duty "holiday" (purely designed to help out developers) was a disgrace as people saved a few thousand so they could overspend (over-borrow) by many thousands!

I think the problem is it’s neither fish nor fowl: it’s got land but it’s not a period rural house with good views; it’s a modern but dated house surrounded by a new build estate so it feels suburban without having the advantage of proximity to amenities. (Ie it’s near enough to Weymouth but not a big city.) The size of the garden and graveyard will put some people off. It sounds like you got the tail end of the Covid pricing bubble before everyone got called back into the office.

However, the plus side is it’s a big house with plenty of room. If your kids have made friends it makes much more sense to stay and make the best of it rather than incur a major loss. I think you need to stop being superstitious. Sometimes things go wrong in life in multiples but it’s naff all to do with the house.

Bottom line is that the land is likely developable due to the newbuild estate. There should be potential to sell plots for new homes or at least get planning permission for further houses. So you should have the possibility of avoiding loss.

But you need to not panic and run. Don’t make another emotional decision that you regret as much as the decision to buy. Stop making decisions with your heart and think clearly with your head.

Haven't read the whole thread so apologies if I'm repeating what others have said but I'd try looking at it another way. It's all you can do as you can't do anything about the slow market and the house is beautiful.
If you were to sell at £695, would you be able to buy the house you want in the area you want without borrowing more? If so, I'd sell and move.
If not, how much more would you have to borrow and how many more years would you be stuck paying off a mortgage?
And would that be worth it to you to live in the place and house you want?
If so, again I'd sell and move.
If not, I'd take it off the market and re-list in maybe the autumn or next spring depending on the market.

Good point, find another motivated sensible seller.

It’s definitely a buyers market in my wee corner of the UK,

I'm not in the market to buy and live nowhere near you but wanted to say your house is beautiful, I love your decor and that is an incredible garden. My gut would be to wait it out if you can, neighbours by me with big detached houses (Scotland) had their houses on for over a year but all eventually sold just short of asking. It just takes the right buyer.

What price level would you reduce to?

You’ve clearly done a lot with the house but as a PP said, it lacks the rural / period character many buyers seek when spending this kind of money. The house itself - being 1970s - is unfortunately not externally pretty at all. However on the plus side it won’t be listed and with that amount of building going on all around you, have you considered offering the entire lot to a developer so they can demolish the house and develop the whole site? It’s all the same to you so long as you get a good price and recoup your investment. And the whole site would be a lot more attractive to a developer than slicing off plots in an effort to retain a house that - no offence - is not special. Any developer with some nous can sort out the access road etc as they would be seeking planning permission anyway.

I don’t think they should sell off plots to keep the house, that’s the worst of all worlds - they won’t have any control over what’s built.

They either need to stay and enjoy as is; or formulate a plan to sell to house and plots of land around it either to one developer or in multiple lots.

original deeds about the access road only being for one dwelling

That can potentially be challenged legally. A deed restriction/ restrictive covenant that limits access to only one dwelling can potentially be changed via a deed of variation or deed of release.

Ask a solicitor to review the exact wording of the deeds to determine who holds the benefit of the restriction and the best strategy for negotiation or legal challenge.

I'm sorry to hear about the fall in value. Just one observation, when you say you don't think the market has fallen as low as 695k, if no-one has offered more but someone does offer that amount isn't it very definition of the market determining its value? If it's offered to the market at 695k but the market will support more you will have more than one interested party and can negotiate, again enabling the market to determine its value. I do wish you well with it and hope the ideal buyer appears.