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 the market, DH and I live a long way from you but have toyed with moving for the past couple of years. We currently have a £450k house with £110k left on the mortgage. Our budget for moving would be max £800k, there is one property we like near us which was originally listed for £895k last April, it’s gradually dropped to £765k in Jan (less than what the current owners paid for it).
We like it, but not enough to pay the extra £1750 a month in mortgage costs and extend the mortgage from 14 years back to 25 years.
A lot of potential purchasers are considering whether it’s worth the outlay or have the cash available (one of your reasons for moving is to reduce costs). You’ve also probably got a fairly small pool of buyers who can afford your house, you’d either need a hefty deposit or household income of £150k+.
I think it looks a good property for a newly retired couple moving to the coast who want a big garden/have the time to do it and a budget from a previous house sale - but you perhaps aren’t presenting it to this market.

We haven't had any offers!

The house is still on at 750 but our agent has suggested that if we did want to reduce it again, dropping it to 695 would attract new interest. But now apparently the last people who viewed it want to come back with a builder for a second viewing and to price up potential work. (Annoyingly we don't know what it is they want to do)

So for now we are leaving it at 750 as they've said they think that's too high and their offer will depend on the price of the work involved.

We've mostly had viewings from retired or semi retired people who maybe have boats/motorbikes/cars and like the space we have here or proximity to the coast. Oh and people who are keen gardeners.

We really want to move ASAP so if we get an offer that allows us to still get a suitable house back home that's fine. We don't necessarily want to make a profit on this house, we just don't want to have massively lost everything. But we all agree that quality of life is more important so if we end up out of pocket but back home then so be it.

Apologies for my mistake ... crossing my fingers for you that the people requesting the second viewing do make a decent offer you can accept.

As a keen gardener that huge garden would be amazing to get stuck into, but it's size means it's an incredibly expensive job too. It would literally take years to do unless you spend a fortune on mature plants.

Would it be worth putting in a couple of stables and fencing part of the land for horses. I think it could be marketed as an equestrian property then. Presumably you have space for parking things like a horsebox? Are you on with that sort of estate agent?

Sales and demand were down long before the war started, and there was pressure on prices and interest rates before the war started,another part of the problem is that the UK is not in good fiscal shape, the bond markets will punish us very quickly if the government make mistakes. What do you see changing in the Autumn?

It is a lovely house. Would make a good place for a wedding and lagre marquee in the garden and right next to the church too. Wonder if anyone ever thought of that kind of business idea.
As it is right next to a graveyard and you have had bad things happen, I would get a priest in to bless the house. Not joking, similar happened to a family member years ago.

Sorry long thread so I've skimmed a bit, but have you considered changing agent rather than reducing price? I know it seems like as long as it's on Rightmove, all agents are the same, but in my experience that isn't the case at all, and it can still make a real difference who you are on with. I think it especially makes a difference when you are at the higher end of the market and a more niche property - which this definitely is. A good agent will get the details in front of people who might have missed it online and be able to turn those leads into offers.
Looking at the house, it is unusual. The absolutely massive but very plain and garden, but in a built up surrounding is one thing that might be pretty marmite. Also the upstairs and downstairs place feels quite unbalanced with quite ordinary sized 4-bed upstairs plus acres of downstairs space is also going to be something that is a niche choice.Lots of people will want at least 5 beds for that money, and there isn't even a downstairs room that would covert to a bedroom. I'm not saying there aren't people out there who that arrangement will work for, but I think it really does need an agent who can actively market the quirks to the right audience.

It's a lovely house. I know it's next to a graveyard but I don't think that is the problem (it wouldn't bother me at all).
You have articulated 'the problem' in your post, at least in an indirect way. Most people in Weymouth won't have a budget anywhere close to the approx market price of your home. The people who are viewing are the older folk who have made £££ simply because the property market has risen so much in the last 35 years or so because of policy choices. They are the only ones who can afford it!
I think your agent is likely right that a decent reduction would attract interest. Your other options would be to keep it at £750 for another 6 weeks or so until you are well into Spring or to consider taking it off for a month and then relaunching, perhaps a bit cheaper, with a different agent.

"The people who are viewing are the older folk who have made £££"

Until they have a buyer they have made it on paper only, you can"t buy a house with that sort of paper! Most people who have not already sold will probably have to lower their price expectations unless there is a serious drop in interest rates.

I think it's only an acre of land, which in horse terms wouldn't be enough for most people with horses. It would also be costly to do fencing and even putting in just a field shelter is a few thousand. And that's before considering there's no school and potentially no hacking if it's a residential area.
It could potentially appeal as a small holding, or somewhere to keep a few sheep as pets perhaps, but it's a bit niche so if buyers wanted it for that they'd probably do what was needed themselves, I think setting it up that way would be more of a turn off for potential buyers.
I don't know how Rightmove works but could key words in the text such as 'large garden with small holding potential or sheep paddock' be picked up in searches for people looking for that type of property?
I'm also not sure if any planning is needed for turning into equestrian use etc.

I found the garden a bit odd too - an almost paddock like/sized space, but not big enough or set up as one, and also not enough features/character to enjoy as an actual garden. It just looks like a headache, not a garden to really enjoy and so big I'd assume (as a non-gardener) it might cost a fortune to turn it into something pleasing.

My thoughts were the council tax is high and EPC rating seems low and the lack of extra bathrooms.
You cant do alot about the council tax. I know you've already done a lot to improve the EPC but does the report give any ideas of what else you can do to improve it that you could do?
And if you're spending money of any sort I think it would be best put towards an extra bathroom/shower room.

The last thing OP should do is spend any more money on this house.

We are in a pretty similar place to you. Want to sell as since moving here our lives have been filled with bad luck, every time something is resolved in the house, something else goes wrong. We have had ours valued at £40k more than we purchased for but have had work done which exceeds this amount. We can’t afford to loose the money so I think we will be stuck here until the market improves

Good advice.

🙄

Did you pay more than it was worth 3 years ago? Did you buy it in 2022? There was a big uplift in prices due to COVID and people moving out of cities into houses near the beach or countryside. The area me and DH want to move to has erratic house pricing depending on when someone bought their house. Some still believe the hype.

I don't think anyone will think negatively if you're selling it for less than you paid for it.

Sorry - I see you answered that already.

Looking at what else is available in the area, I can see why it might not be getting as many viewings for the price. Maybe it is the photos but it looks a bit disjointed, room wise and furnishings. I'm guessing you've put all your money into the extension and energy and not lived there long enough to furnish it and decorate it to be more fitting for the house so it has a defined personality.

Also, does the roof need doing? The photos make it look like it does. The solar panels in the garden aren't very attractive either. I love the gravel seating area though and also the hallway, although see the stairs are in the lounge. You're probably just needing a buyer who wants or needs the land. I like the suggestion of adding stables - if it's an area where problem keep horses and ride.

Have you tried to sell some of the land off to a developer? With the new builds around, it looks like the field/garden could easily take a few new houses without being jarring to the area.

The roof is absolutely fine. It's a very solid house.

We've had developers contact us but feel that any new viewers might be put off by having less garden and sharing the driveway etc.

Thank you everyone for the comments but this is starting to stress me out now so I'm going to leave it for a bit but I will update if and when I can.

Exactly, we are in almost the opposite world to 2022 now as far as sentiment goes, people really are struggling to get mortgages they can afford now.

It's a lovely house. The only red flag for me would be the unmade road.

But tbh I think the issue is that many people have the budget they would need for it.

My much cheaper/smaller house than yours in London has dropped in value by £75,000 in 4 years- the market is dire atm (valuations carried out last week). You either give it away very cheaply (allowing someone else to profit from your work) or stay put.

They won"t profit though, they will just get a house at a fair market price.

Absolutely, and Iran and the implications are massively impacting. One agent told me last week that business is down 80% since the war started.

Would you my asking what price bracket your house is in?

I think business was already down massively even before the war started so that is mental!

Exactly. The point is that no-one is budging right now.