Disillusioned vendors - I'm thinking of making an offer 2/3rds of the listed price

[Michael55]

A neglected Victorian house has been on the market and vacant for 18 months, rented for an unknown amount of years before the sale. Two agents, no sale and no offers. For decades it's been poorly maintained and empty for half of the year (used as a second home), the cheapest possible workmanship and materials, but still has plenty of original features. It's full of mold, damp, condensation, very recently repaired holes in the roof which has caused massive water stains on the ceiling due to issues with the chimney breasts, wallpaper has started peeling in the last 5 months or so and the ceiling paper is still peeling, cracked wall plaster, broken fence, cheapest 'carpet', some fireplaces, but no fires, the holes just covered with tape or MDF, etc.

The house is priced about 20K under that of a ready-to-walk in home. To put it into context, a massive sprawling 5 bed, 250m2, council tax E, stately gated mansion (with original gates!) 5 mins down the road in a cosmetically slightly worse state (but structurally good, roof good) was auctioned for 25k less.

In the 18 months it's been on the market, the vendor has reduced by about 10k. The house is quickly getting worse now that the damp is deep into the fabric of the bricks and ceiling. I've done a very quick tot-up and repairs come to about 50k - and that's without seeing inside the roof!

I think the vendor thinks, because the house is sizeable, it's therefore worth a lot, but the paradox of size, big house = big repair bills etc.

I'm new to house buying, are disillusioned vendors for period properties common?

 

[Lacan07]

A neglected Victorian house has been on the market and vacant for 18 months, rented for an unknown amount of years before the sale. Two agents, no sale and no offers. For decades it's been poorly maintained and empty for half of the year (used as a second home), the cheapest possible workmanship and materials, but still has plenty of original features. It's full of mold, damp, condensation, very recently repaired holes in the roof which has caused massive water stains on the ceiling due to issues with the chimney breasts, wallpaper has started peeling in the last 5 months or so and the ceiling paper is still peeling, cracked wall plaster, broken fence, cheapest 'carpet', some fireplaces, but no fires, the holes just covered with tape or MDF, etc.

The house is priced about 20K under that of a ready-to-walk in home. To put it into context, a massive sprawling 5 bed, 250m2, council tax E, stately gated mansion (with original gates!) 5 mins down the road in a cosmetically slightly worse state (but structurally good, roof good) was auctioned for 25k less.

In the 18 months it's been on the market, the vendor has reduced by about 10k. The house is quickly getting worse now the damp is deep into the fabric of the bricks and ceiling. I've done a very quick tot-up and repairs come to about 50k - and that's without seeing inside the roof!

I think the vendor thinks, because the house is sizeable, it's therefore worth a lot, but the paradox of size, big house = big repair bills etc.

I'm new to house buying, are disillusioned vendors for period properties common?

Not really, some people have a price in their mind and they won't budge regardless - just ask an estate agent. And if they've no reason for a quick sale they'll demand the asking price. In life somethings only ever worth what someone's prepared to pay for it.

The problem is its very difficult calculating the costs of renovating, prices for building work have escalated over the years. It sounds like the roof will be your biggest expense here.

 

[CliffordPope]

You have to reckon on some people being so stubborn that they will hold out for their price until the house has collapsed and is worthless.
I can think of several houses around here where that has happened. I can remember when they were inhabited and in sound condition, and now they are falling to pieces. The absentee owners are not interested in any offers.

The same is true of old cars. The owner of a barn full of classic cars refused all offers. When I last saw the place the barn had collapsed and the cars were rusted heaps being dragged away for scrap.

 

[Flyfisher]

I'm new to house buying, are disillusioned vendors for period properties common?

I'd say this applies to all house transactions, perhaps more so when extensive renovations are required, but not particularly specific to period properties.

There are no list prices for houses (except perhaps a new build based on cost + profit) so they are only worth what someone will pay. They all have a 'guide price' based on sales of similar houses in similar areas but that's about it. When a seller has a minimium price 'in mind', for any number of complicated and diverse reasons, they can't be forced to sell and, as CliffordPope has pointed out, they may refuse all lower offers even while the house (or car) continues to deteriorate.

The same, or similar, is true for buyers. There may be a fundamental affordability issue but there will also be the issue of worth. A buyer may be able to pay the asking price but it may not be worth that amount to them, so they buy elsewhere. The reverse is also true, where a buyer will offer over the asking price because . . . well, because of all manner of reasons personal to them. And that's the thing. It's not only about buying or selling a property, it's about buying or selling a home and that involves all manner of emotions, which may seem completely irrational to a third party.

C'est la vie.

 

[Michael55]

You have to reckon on some people being so stubborn that they will hold out for their price until the house has collapsed and is worthless.

Totally, and that is what is occurring here. Do you even justify the low offer, or just put it in, hoping the agency explain the facts of depreciation?

I don't want to mention the list of works that a cursory inspection has identified as justification because it wouldn't be fixed to any decent standard - there's cheap carpet everywhere that's been cut with nursery school scissors and put even where it shouldn't be, like on the back of a toilet to cover something, and even sticking out of a hole in a soffit because that's a valid repair, right?

 

[Lacan07]

Totally, and that is what is occurring here. Do you even justify the low offer, or just put it in, hoping the agency explain the facts of depreciation?

I don't want to mention the list of works that a cursory inspection has identified as justification because it wouldn't be fixed to any decent standard - there's cheap carpet everywhere that's been cut with nursery school scissors and put even where it shouldn't be, like on the back of a toilet to cover something, and even sticking out of a hole in a soffit because that's a valid repair, right?

Don't waste your time with the low offer based on what you may think is required, I doubt it will wash. They say always offer 10% below the asking price but it's often ignored.

 

[Michael55]

But I think a decaying wooden soffit creating a large hole in the corner of the house with a large water stain down that corner of the upper bedroom be in need of repair? A window with a broken lock sellotaped shut, re-pointing that doesn't look like it's ever been done. crumbling plaster, large water stains (1M + diameter) on the ceiling with paper peeling revealing the damage all indicate that works need to be done?

I don't see the point of offering the offer price, then hoping they'll reduce the price after the survey. Absentee owners and so it probably won't wash.

 

[Flyfisher]

Don't waste your time with the low offer based on what you may think is required, I doubt it will wash. They say always offer 10% below the asking price but it's often ignored.

I also doubt it would wash, but it may not be a waste of time in the sense that it's doesn't really take any time at all. Also, if the seller only receives low offers they might, perhaps, reconsider their sale price and conclude they're being too optimistic. Or they may not.

I suppose the bottom line is to ultimately only offer what the property is worth to you, taking everything into account (even if it's in perfect condition) and be prepared to walk away if the offer is refused.

 

[Stevers]

Back in 1996 we bought our project house that had been on the market for 18 months and where a sale to a HA (for conversion to bedsits) had just fallen through. For background the housing market was only just starting to recover after the mortgage relief price crash. The asking price had much of the work required priced in, but we identified a major additional project (a rebuild of a big road fronting retaining wall), so we knocked that off the price (and a bit more) and put our offer in. This was accepted, but after it all went through one of the sellers (somewhat cruelly) confided to me what he would have accepted by that point. We paid £65k, on an asking price of £78k (finished value £100k), but he would have taken £55k! I reckon that we just about broke even at the offer price, but got a house that we love out of it that has served us well. Looking back it was amazing what £35k could do to a house in 1997, although of course we didn't know that then.

There's no harm in a fully justified low offer in the situation these houses are in. The problem being that the only reason it hasn't sold is that for reasons others have identified, there's almost certainly no money in it.

 

[Michael55]

Perhaps it's worth pointing out that I'm the only person to have viewed it in the last ten months! And it failed to sell in its last listing of a year at auction!

 

[Kearn]

You make the offer you’re willing to pay. There’s no rules and no point trying to reduce after a survey frankly.
You don’t say your position, but if you’re chain free/cash etc then the leverage is yours.
An agent doesn’t really care for the sale price within reason, they just want to sell and get onto the next one. They only get 1-2% of sale, so a big drop to sale price doesn’t matter as much when it’s scaled down.
The market is still slow and it’s a buyers’ market, if you’re able to move on a purchase.
Sounds like they’re a bit delusional and stubborn and logic won’t help too much.
But you never know…

I’d also say from a cursory skim of all the issues you’ve mentioned, their duration and the approach to ‘fixing’ taken to date, that £50k isn’t going to touch the sides.

Why bother with this one if there’s alternatives and this one is way overpriced? With certain types of sellers, the issues run deep and you may end up with a ton of headaches for a long time.

 

[Michael55]

Cash, no chain, wanting to complete asap to be honest so would hurry along the conveyancing process.

I love it, but I'm ready to walk away. The more I think about it, the more issues I think of and I think you're right. I'm going to just find more and more issues.

I looked at a slightly smaller house, some period features, great decor, well-looked after, clearly a home not a rental, massive garden for 20k more than this vendors asking price and it really hit home how inflated it is.

 

[Flyfisher]

Perhaps it's worth pointing out that I'm the only person to have viewed it in the last ten months! And it failed to sell in its last listing of a year at auction!

Auctions tend to attract experienced building professionals who know a bit about properties, their typical issues and how to fix them up and sell them on for a profit. If that type of potential buyer can't beat the reserve price then there's definitely something wrong somewhere. Never mind walking away, it might be time to get your running shoes on . . .