How much to offer for a house needing complete renovation?

[ILoveMondeo]

I'll keep it brief,

In a good state of repair, the place may be worth 310k on a good day.

It needs approx 60k of work to make it ship shape.

Is 250k the right price? Or a bit less because I've got to go through the pain and strife of making it right? (Not to mention stumping up 60k)

Want to make this as quick and painless as possible.

Cheers

[hornetrider]

I'd want to have a profit for all the effort frankly. What's it on for?

[hedgefinder]

trouble is that property with development potential is always sought after and very often over priced/over valued...

[JQ]

ILoveMondeo said:

I'll keep it brief,

In a good state of repair, the place may be worth 310k on a good day.

It needs approx 60k of work to make it ship shape.

Is 250k the right price? Or a bit less because I've got to go through the pain and strife of making it right? (Not to mention stumping up 60k)

Want to make this as quick and painless as possible.

Cheers

A professional developer would pay £310,000 less :
Cost to purchase - solicitor, surveyors, stamp duty, finance
Cost to develop - £60,000
Ongoing finance costs
Profit - 15-20% of total costs (inc purchase price of house)
Cost to sell - estate agent, solicitor

In reality, someone who's watched too many episodes of Sarah Beeny will pay £275,000.

[andy43]

Depends how you've arrived at the 60k estimate.

[ILoveMondeo]

In on for 300k, but has been for weeks and the agent has been quite candid that they know they are wasting their time at that price and the vendor is coming around. They seem(ed) Oblivious to the fact it's a st hole. Every viewing has turned their nose up so far.

It's ex council so will have its upper limit, it's a small estate about 50/50 nice/scummy houses.

I can't see how it's doable to turn a small profit for any more than 235, and I'm not entirely comfortable with having such a tight budget considering how much needs doing.

Also thinking I'll probably get told to do one at 225..

Positives, space for a double garage, off-road parking for 3 cars, massive garden and views over fields and woods.

Negatives, very average estate, (but in a lovely area of Oxfordshire countryside.)

This isn't a plot for someone's grand designs project, far far from it.

[ILoveMondeo]

JQ said:

A professional developer would pay £310,000 less :
Cost to purchase - solicitor, surveyors, stamp duty, finance
Cost to develop - £60,000
Ongoing finance costs
Profit - 15-20% of total costs (inc purchase price of house)
Cost to sell - estate agent, solicitor

In reality, someone who's watched too many episodes of Sarah Beeny will pay £275,000.

I was fairly sure the "buy, renovate and flip" thing was pretty much dead these days outside of large expensive projects far too expensive for the amateur.

Entirely reasonable figures on the pro estimate, makes perfect sense. Thanks.

[ILoveMondeo]

andy43 said:

Depends how you've arrived at the 60k estimate.

At the moment it's an educated guess, based on a fair bit of research, some help from PH and a chat with my favorite builder. He's coming to take a look next week. He's also just finished a similar project which is handy.

I'm thinking of whacking in an offer this week, so the vendors can have a think over it.

If it were all good and in great condition I'd happily pay 300k for it.

[pork911]

200k start

[jonah35]

ILoveMondeo said:

In on for 300k, but has been for weeks and the agent has been quite candid that they know they are wasting their time at that price and the vendor is coming around. They seem(ed) Oblivious to the fact it's a st hole. Every viewing has turned their nose up so far.

It's ex council so will have its upper limit, it's a small estate about 50/50 nice/scummy houses.

I can't see how it's doable to turn a small profit for any more than 235, and I'm not entirely comfortable with having such a tight budget considering how much needs doing.

Also thinking I'll probably get told to do one at 225..

Positives, space for a double garage, off-road parking for 3 cars, massive garden and views over fields and woods.

Negatives, very average estate, (but in a lovely area of Oxfordshire countryside.)

This isn't a plot for someone's grand designs project, far far from it.

I think you're wasting your time. Move onto something else.

You're not gonna get 25% off.

Try by all means but just make a quick offer and move on. Beware the estate agent wont take you seriously in future though.

[jonah35]

ILoveMondeo said:

andy43 said:

Depends how you've arrived at the 60k estimate.

At the moment it's an educated guess, based on a fair bit of research, some help from PH and a chat with my favorite builder. He's coming to take a look next week. He's also just finished a similar project which is handy.

I'm thinking of whacking in an offer this week, so the vendors can have a think over it.

If it were all good and in great condition I'd happily pay 300k for it.

£60k to do up an ex council house seems steep.

Kitchen units and appliances £2-3k
Bathrooms £1500 each
Rewire £2k
Carpets £1500
Decoration, new doors, skirting etc £2500
Labour £7k
Id struggle to see how you could spend over £20k.

Even if you needed central heating, double glazing and expensive appliances and a garage then £30k max.

Where does £60k come from?

[The jiffle king]

I had a similar situation 18 months ago and did the following as I knew that 25% off would offend. I told the agent (who knew it was over-priced) that I would like to make an offer, but did not want to offend their clients. They took that to their clients who asked for the offer anyway as no-one else was bidding and we put in 25% less. 6 weeks later, they came back to us and we settled on 20% less which was the price it was worth.

I'm not saying my tactics would work in your case, but given the sellers, I needed time to warm them up to a large reduction

[ILoveMondeo]

The jiffle king said:

I had a similar situation 18 months ago and did the following as I knew that 25% off would offend. I told the agent (who knew it was over-priced) that I would like to make an offer, but did not want to offend their clients. They took that to their clients who asked for the offer anyway as no-one else was bidding and we put in 25% less. 6 weeks later, they came back to us and we settled on 20% less which was the price it was worth.

I'm not saying my tactics would work in your case, but given the sellers, I needed time to warm them up to a large reduction

That's precisely what I've done so far... I've told the agent that I don't want to offend by offering way below the vendors expectations, they called me yesterday saying "please, just make an offer"... I said I'd get back to them.

[ILoveMondeo]

jonah35 said:

I think you're wasting your time. Move onto something else.

You're not gonna get 25% off.

Try by all means but just make a quick offer and move on. Beware the estate agent wont take you seriously in future though.

I've told them that any offer I make is going to be "well under 250".... and they are still asking..... Will fire up my random number generator and make an offer later this morning.

225, I'll just get told to fudge off.. 250 I reckon they'd take straight away but that's too much for me with all the work that needs doing., so I'll go somewhere in the middle.

[carreauchompeur]

No way, go in at 220... If they haven't turned up their nose of "Well under 250" then you need to be slightly embarrassed at the first offer you make!

[ILoveMondeo]

jonah35 said:

£60k to do up an ex council house seems steep.

Kitchen units and appliances £2-3k
Bathrooms £1500 each
Rewire £2k
Carpets £1500
Decoration, new doors, skirting etc £2500
Labour £7k
Id struggle to see how you could spend over £20k.

Even if you needed central heating, double glazing and expensive appliances and a garage then £30k max.

Where does £60k come from?

Can I have the number of your builder?

Or what decade was it you paid that lot?

I'm working on this (all including labour/fitting, I'm not lifting a finger)

Windows + exterior doors 10k
kitchen 10k
bathrooms 8k
rip out everything/replaster/repaint/repair or replace ceilings where needed 10k
boiler+re-plumbing 5k
wiring throughout 5k
Ground works / landscaping £3k (there's a crater of an ex-pond and all kinds of cack in the garden)
Floor coverings 3k
and a contingency for doors/frames/floorboards/etc that are past it.

I'd put all of those at "half decent, but not top of the line" costs for F&F. 3k for a kitchen on your list seems massively low, you'd struggle to get appliances for less than £1k.

I'm not including any improvements that would be "just for me" like a decent fireplace, groundworks and garage build, electricity to garage/garden, etc.

Also, I've no idea what state the conservatory is in, may need replacing or just getting rid of. I forgot to check when I viewed the place.

[andy43]

3 bed semi - s/hand high gloss kitchen with Bosch cooker/hob - new worktops and splashbacks, new bath and taps, complete utility room and a downstairs cloaks install from scratch inc plumbing/drainage, partial rewire/extra sockets, 3 extra rads, replaster small areas here and there, all doors stripped with new hinges/knobs, replaced two huge blown dg units, new burglar alarm, recarpet throughout, redecorate throughout - done for under 6k doing 90% DIY and mates rates for the rest.

But add on new windows/doors, getting a plasterer in etc, and the budget would have doubled or tripled instantly.

You can gut it yourself, decorate and landscape yourself and an empty pond is a result - less skips
Get a few window/door quotes - really really shop around, go ex display or secondhand kitchen and bathrooms, grant funded boiler and judicious use of ebay and you can eat into a big chunk of that 60k. If you have the time, you'll save a fortune.

[LotusMartin]

If you're not embarrassed by the offer you make then it's probably too high.

[Neil - YVM]

ILoveMondeo said:

Can I have the number of your builder?

Or what decade was it you paid that lot?

I'm working on this (all including labour/fitting, I'm not lifting a finger)

Windows + exterior doors 10k
kitchen 10k
bathrooms 8k
rip out everything/replaster/repaint/repair or replace ceilings where needed 10k
boiler+re-plumbing 5k
wiring throughout 5k
Ground works / landscaping £3k (there's a crater of an ex-pond and all kinds of cack in the garden)
Floor coverings 3k
and a contingency for doors/frames/floorboards/etc that are past it.

I'd put all of those at "half decent, but not top of the line" costs for F&F. 3k for a kitchen on your list seems massively low, you'd struggle to get appliances for less than £1k.

I'm not including any improvements that would be "just for me" like a decent fireplace, groundworks and garage build, electricity to garage/garden, etc.

Also, I've no idea what state the conservatory is in, may need replacing or just getting rid of. I forgot to check when I viewed the place.

Your costings are reasonable.

What its worth is in some ways determined by what you are buying for.
If you are buying for you to live in, and one in good condition its worth £300K, then if you can buy it and finish it to your taste/specification for £300k, then that's far better than buying another one at £300k, that has used kitchen bathroom, to someone else's taste.
Locally even at auction they are selling at a level where there is no margin to be made, but people can get a their house as they like it.
Obviously if you can buy it for less then great.

[schmunk]

ILoveMondeo said:

3k for a kitchen on your list seems massively low, you'd struggle to get appliances for less than £1k.

http://www.ikea.com/gb/en/catalog/categories/depar...

http://www.ikea.com/gb/en/catalog/categories/depar...

...and so on.