Guide Price?

[DaisyJo94]

We have booked a viewing for a property on the weekend. It is overpriced and has been on the market 4 months but ticks quite a few of our boxes. Our friends actually went to view it and confirmed it needs complete renovation and is most definitely overpriced. I was hoping there could be some negotiation as it is not lived in and from my very brief discussion with the EA, the sellers want to sell fast.

It isn’t going up for auction but the brochure says “guide price”. Does anyone know what this means? I haven’t come across a guide price on a house that isn’t up for auction before.

The EA couldn’t have been less helpful/ vague. I’ve sent an email following up but still no response and no doubt they’ll come back with a similarly vague response via email. If not more so.

I have always ignored wording like guide price or offers in excess of.

Offer what you think it's worth or are prepared to pay and let the sellers decide if they're happy to accept or not.

For context we offered 10% under the 'offers in excess of' price and settled on 7% under. Similar situation to you in that the house had been on the market for several months, reduced in that time, vacant and needed complete renovation. Sellers clearly just wanted it gone!

Asking price, list price, guide price, price, all largely mean the same thing, it's a rough idea of what the seller is hoping for.

Thank you. I wondered whether it was an “offers over” wording. We would need to go in at 15% under the “guide price” to make it work but they reduced it by 5% last month.

Forget %, forget wording.
view it and if you decide to make an offer that should be what you feel it is worth. What you happy to pay and why. It’s been marketed at a price for its condition, what you need to understand for yourself is the cost and time frame for doing the work.

you can be strong on your offer if you are in a good position eg cash & renting and can complete quickly.

The 15% under is based on my absolute upper limit knowing its current state.

It is a heart over head situation. It’s an area I grew up in so I know it well but the house is massively overpriced for the work required. I could buy the house 4 doors down for 40% cheaper (if not cheaper again as that house has been on the market 2 years).

I prefer the more expensive house because of the plot and it is a bigger house overall. It is 4 bed rather than 3 so we wouldn’t need to extend or move for quite some time.

40% less but your not comparing like for like!

Do you actually know what is essential and what is nice but not priority when you haven’t viewed it? How have you costed the renovations to know 15% under guide is affordable for you? I understand the head and heart situation and it’s not easy to navigate and keep a sense of perspective: is it really over valued or is it simply too high for you and you are justifying it that way (totally ok with that BTW, as long as you understand that’s what you are doing!).
you may get it for a lot less than the 15% if they are desperate to sell and you can complete quickly, but prior to viewing and really knowing what you are dealing with I don’t think you can attach any credible value to your theoretical offer price. I’ve found what you see on paper can vary vastly to what you view, both good and bad!

keep an open mind, be honest with yourself, come back here for a sanity check after the viewing.

or buy the smaller one at a great price and invest in it if that’s a more comfortable financial position for you.

I agree, it isn’t like for like, the cheaper one is complete renovated, albeit not to my taste. It’s smaller, both in house and garden and is 3 bedrooms so I see why the more expensive one comes at a premium but the cheaper one has been on the market for 2 years and no other property in this area has sold for as much as the listing price for this one.

Essentials would be bathroom and kitchen. The kitchen doesn’t even have an oven, it is pretty non-existent. The bathroom clearly hasn’t been upgraded in 40+ years and looks to be hanging on for dear life. The threadbare carpets with big stains on would need to be replaced but that’s a fairly quick/ easy and cheap job in the grand scheme of renovating! We would install underfloor heating and either stone or wooden flooring to modernise and make easier to maintain but haven’t factored that into current value as that isn’t a need. It has a terrible EPC so will need insulating and bringing up to modern standards. The cesspit would need to be looked at but I could almost guarantee they’d recommend the new system given the change in regs. The electrics, heating system and roof would all need to be assessed but again, they haven’t been replaced since the house was built so almost certainly need bringing up to current specs or at least keeping an eye on but realistically we would replace whilst doing all the other work. Glazing would need to be inspected but again, what double glazing lasts 40-50 years?

We couldn’t justify paying its current listing price and having to spend the money to renovate it. We want to retire early so we need to be fairly certain that we wouldn’t lose money on a property (as sure as you ever can be).

Its appealing because it’s a blank canvas and we could do as we please with it whereas most properties in the area have already been renovated and I just don’t like the modern aesthetics. As an example, one has a black bath and a feature marble wall. I’m sure many buyers would love that but I detest it! The handless kitchens aren’t to my taste either and kitchens are so expensive so we are reluctant to spend at the upper end of our budget knowing we would want to replace it all.

No the wording does not imply "overs offer" - more like offers in the region of.

If you like it, offer what you think it's worth - easy.

I wouldn't bother comparing it to the 3 bed though, they sound like very different houses.

Can you actually find an equivalent sized 4 bed house on a similar sized plot in the immediate area, that sold within the last two years?

Or is it the case that houses in the immediate area are invariably 3 bed, or are larger 4 bed homes occupied by Boomers who are still a decade or more away from selling up/dying?

In the latter case you don’t really have a market rate to test it against, which is probably why it’s a Guide Price. The agent isn’t sure how much more it is worth than the turn-key 3 bed houses nearby.

That being the case: I’d compare square footage of the nearest 3 bed that sold recently. So let’s say the three bed house is 1200 sq ft and sold in December for £360,000. So, £300 per sq ft. Let’s say your 4 bed house is 1700 sq ft. So that is £510,000 at a similar price per sq ft. You might then want to reduce the price because of risk of hidden problems and decorative repair. But then you might need to adjust the price up a bit because this is a unique house on an unusually large plot etc etc

The cesspit, this is actually a legal requirement for them to sort and be compliant before it can be sold, so you can take that cost off the asking price with a legal agreement to sort it after. Or they do it before completion.

How old is the house? What size is it Sqft?

FYI you can’t use underfloor heating with a wood floor.

Glazing, you can buy magnetic secondary glazing, and fit yourself, very cheaply and it is proven more effective than double glazing.

My parents would know the exact year but believe it was built around 40 years ago. The couple has passed away so hasn’t been lived in for a good while.

I am not sure in square feet but it’s 190sqm.

You can have oak flooring with underfloor heating, you just need to make sure you choose the right products. We have it currently and no issues.

The actual frames look terrible in some of the pictures so assume they are beyond patching up and will need replacing. Our friends said they would need doing and the front door will definitely need doing as there’s a gap between the door and door frame.

There is very little on the market and what little there is, has been on the market for a long time. Only 3 houses have sold in the last 2 years and they are very small 2 bedroom stone cottages so it’s tricky.

There are a couple of bungalows but they are just so different to this house, one because they are bungalows but two, they are also enormous. 5 bedrooms, 4 bathrooms, etc.

Noticeably, they are cheaper but then is that because older people tend to want a bungalow over a family and what pensioner needs a 5 bed, 4 bath home?