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

[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.

[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.

[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.

[ILoveMondeo]

schmunk said:

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.

Cool if the kitchen is exactly that size... or you only want appliance down one wall.

Point taken though.

[ILoveMondeo]

Well, I've stuck in an offer at 235k, give me scope to fix it up, and a small contingency.

I've also made it clear that this is subject to surveyor and builder not finding anything horribly wrong that's not been taken into account (mainly structural problems, conservatory needing pulling down, or dry/wet rot in the timber).

Will update on what happens!

[ILoveMondeo]

Too Late said:

Bad quality but here is our building quote for a 4 bed house.

Cool, thanks for that, looks like structural repairs or extension on there?

Loosing the some of those big ticket items like substructure stuff, and roof works, and a few other bits and bobs I wont be needing, it all looks pretty much in line with my expectations. Thank you.

If of course survey reveals issues I dont know about then the whole thing may well be off.

[ILoveMondeo]

blade7 said:

Blackbird Leys Estate ?

haha, NO! Miles away!

[ILoveMondeo]

jonah35 said:

My guy charges £115 per day and it would take 10 weeks ish so £6k ish labour.
Windows, my guy has just done 3 double glazed, fitted for £750.

£8k bathroom on an ex council house? Wickes do a bath, basin and p bath with glass screen for about £400. Fancy taps plus tiles at £10psqm leaves change out of £1k!.

Boiler and plumbing done for £1500

Rewire for £5k??!! Check on myhammer for quotes.

I know down south is dearer but materials same price.

I will of course be shopping around for quotes should it all go through, as I said they are vaguely educated guesses at best, I may well have over cooked some items but equally I've certainly underestimated others.

All useful info, thank you, I will definitely be taking all the advice here I to account.

Just waiting to hear back from the vendor now, I'm disinclined to increase my offer if they don't accept, certainly not until I've been around with a builder.

I doubt they will accept anyway, they were so over optimistic about the value I think they'll probably just take it personally.