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Hello
I’ve been looking for somewhere to buy for a couple of years and have finally found somewhere! The thing is, it’s not a house! It’s an old community hall which was originally a hayloft/barn and have been empty for a few years. It’s massive and has so much potential and eventually I would want to convert it to a three bed house and a little studio at the back.
I went to see the property with my friend who is a builder on Wednesday and we spent an hour and a half looking over it. It’s on the market for offers over 60 000 and I would need to spend 30 000 to make it habitable and another 70000 to complete the renovation. I have remortgaged my flat and have 105000 mortgage in principle for the purchase and first part of the renovation.
When I phoned the next morning to make an offer the estate agent told me there had already been 6 offers that morning...and I thought I had been quick!
Having spoken to the builder, an architect and the local planning officer I feel confident I am able to change the use from commercial to residential and get planning permission. Although it requires a lot of work included demolition/structural work etc I am also confident I don’t need a structural survey having looked over with my builder. So I wouldn’t be attaching any conditions to the offer such as subject to planning or survey.
When I heard that there had been 5 other offers I went in with my highest bid of £78 550 and expressed clearly that I had a mortgage in principle, need no subject to clauses and also said I was not a developer and work/live within the community.
The estate agent phoned back later that day that the 3 people on the deeds needed to get together and discuss the offers. So I have to wait 3 days. I’m now panicking and thinking maybe I offered too low! Although this was my highest comfortable bid I could probably pull together another 3000 if I sold my bike 🙁
I guess I want to know peoples opinions of wether 30% over the offers over on something that’s basically a shell of a building was a good strong offer or if I’m likely to be outbid? I could probably up my offer first thing Monday. Thanks!
There won't be a standard percentage but that does sound low. What it's worth will depend on location. Also can you even get a mortgage on it?
Thanks nick, although not exactly what I wanted to hear!!
I own a flat in the city outright so apparently that’s enough for the lender as security.
So it’s in a small village which to be honest I didn’t think was that desirable but I work very close to it. Obviously I was wrong! Guess people are moving away and into the countryside.
From what I’ve read online everyone says base your offer on the home report but there isn’t one for this as it’s a commercial!
the estate agent told me there had already been 6 offers that morning
was there though? A classic tactic to get you to bid higher
What is the property going to be worth after the work. You are talking about spending over 160k so can I assume you think it will be worth c200k?
In which case a builder might be thinking buy for 100k, spend 50k and make 50k. But if you can’t afford to go higher comfortably don’t, just not worth getting into huge debt on a project with what it sounds like are a lot of ifs.
was there though? A classic tactic to get you to bid higher
Yeah, I wouldn't trust an estate agent.
You could be right! I know the neighbors and they said it’s been a revolving door of viewers so I know they’ve had a lot of viewings.
I just can’t believe people were so quick to make an offer. It had only been one day and I went to see it with my builder and no one had been up into the loft as the hatch was so dusty and rusted shut. We managed to get it open. The roof spaces was what sold it for me. But I don’t know how people could bid on a place like that without inspecting the roof!
Yeah I can’t compete with builders and developers. That’s why I thought putting the bit in about living and working in the community might help me as it’s not an individual selling but a sort of charity.
Sounds like a money pit.
Stick to your guns, only go higher if it really is the dream place and you will stay ten years+
singletrackworld.com/forum/topic/offers-over-on-renovation-project/#post-11837838
Tbh I hadn’t thought of what it would be worth as I intend to stay in it for the longhaul! But yes 200k is probably about right.
With what you said in mind then it’s probably not worth the stressing about upping my bid by a few thousand if someone’s going to offer 100k!
Don’t get blinded by the dream only to financially cripple yourself. Even “normal” houses cost way more than you expect when you buy them let alone a project like this. Stick to your financial limit and hope that you’ve done enough and that being a local and not a developer or buy to let will help.
If it doesn’t work there will always be somewhere else.
I think you just have to be happy that you have put in your best bid. You'll worry now that it's not enough and if successful, that you paid over the odds.
Every builder within 5 miles will have been aware it was empty and would have been waiting for it to come to market and have some figures in their heads.
We got our place after some back and forth, then final sealed bids, an empty house and the last unimproved place in the village, about 10 days from listing to sale agreed.
In the end, it's a house we could never afford in it's finished state and we have done it within what we could afford, so who cares. If we didn't get it, well something else always comes along.
Thanks so much everyone, all really good advise. I’m on my own so really appreciate the advise/pep talk as just sitting waiting so long for the decision is driving me crazy. It’s not worth getting financially stressed so I’ll wait/just keep looking!
I made a deal with my friend that if I get the place with my bid then I’ll shave my head. If I don’t get it I’ll be happy that I don’t have to shave my hair off and if I do then I’ll be so happy that I won’t care I’ve got a shaved head!
Absolutely detest the offers over bullshit. Should be banned.
I'll be selling a place soon and am absolutely refusing to sell with an EA unless it's fixed price.
You've done the right thing here. Sit tight and fingers crossed.
Let us know how you get on and if (when!) you get it, we demand a build / renovation thread.
Good luck,
APF
Yep, you've done your bit. Worked out what it is worth to you, worked out your finance and got your offer in. Unfortunately there will be others, likely commercial developers, with deeper pockets willing to work to other margins. A lot of interest means the price goes up a lot. Sit tight and you never know. In fact even if you miss out that might not be the end. We missed a property at auction, only the third highest bidder. Two months later it had all fallen through and we were back in
Absolutely detest the offers over bullshit. Should be banned.
Nothing wrong with it if run properly with a sealed bids process, and closing date etc. Where it becomes dodgy is when there's someone leaking the other bids to their mate.
I’ll be selling a place soon and am absolutely refusing to sell with an EA unless it’s fixed price.
That's very noble of you, presumably, you are either not selling to maximise your value or you are just going to whack up the asking price.
Nothing wrong with it if run properly with a sealed bids process, and closing date etc.
The problem is that it rarely is run properly.
It also tends to play to the Scottish stereo type of having to squeeze every last penny out of everything - and yes I know it’s used in other parts of the UK too, but it is a traditional part of the system in many parts of Scotland.
Only thing with a builder he will want a profit. Wheres as you dont. So in theory they'll bid less.
When I bought my last place its was a rough repo. I went in a fiver under stamp duty so anyone else would have to factor that in...
Markets on fire mate. In Dumfries and Galloway they reckon +10% this year alone
Hi everyone! Thanks so much for all your advise. Sad news, I didn’t get it. I was in fact the highest bidder by a very small amount but they decided to go with a cash offer. Gutted! I didn’t really think that my mortgage in principle on a house I already own outright would have been thought of as that risky. As soon as I told my family they all said they would have been able to give the money. It’s a shame as if they had come back to me and told me that I was the highest offer but I would need to be cash then I would have been able to do it!
Never mind... all a learning curve!
That’s very noble of you, presumably, you are either not selling to maximise your value or you are just going to whack up the asking price.
Not noble at all. I simply hate that system so why would I use it.?
Whatever the house is valued at it'll be up for sale at that price.
I'd rather have principles than try and squeeze a few extra pounds out, at the risk of massively disappointing some poor "bidder"
I basically think the offers over thing treats buyers like shit and is purely to maximise the money that estate agents can make from you, with no consideration for buyers.
Keep in touch with the agents etc advise them you could fo cash.
We missed out on here, but I kept the vendor n agent upto date on where we were upto and when it fell through I got a call....
My missus thought at the time pointless but hindsight showed it was well worth it.
Ach well. Must mean something better will come along.
Don’t beat yourself up about it - I’ve been there myself, bidding at auction but set myself a highest reasonable bid and lost out but subsequently found out the buyer spent significantly more than expected and regretted their purchase (it looks great but they spent the 25% more than I set as my maximum and then quite some on top).
Yeah I know I shouldn’t let it get to me. I think it would have been a lot easier if I had just known I had been outbid. Just feels a bit depressing as I have been looking everyday at the listings for about 2 years and have only found 2 places to make an offer on. I live in a very rural place so there’s not much to choose from and the prices just seem to be getting higher and higher before my eyes!
As soon as I told my family they all said they would have been able to give the money
Borrowing long-term off your family is never a great idea unless you are very stuck. You worked out limits and stuck to them, great job. It's unfortunate but these sorts of things are a money pit and going in with no spare capacity could have been a disaster.
We had this as well- missing out to cash buyers even though our offer was higher and we had a mortgage in principle. I think they thought cash would complete quicker- when we got an offer accepted somewhere else the mortgage cash was ready in a week- the local authority searches took 31 working days!
The local bakery is up for grabs - with planning permission for a 4 bedroom house conversion already in place. It looks great and a building stands, needs a couple of walls added internally but otherwise seems ok.
Thing is, I know nothing about house renovation and it would likely need to be rewired and plumbed, but it had me daydreaming for a week as I was planning on what I'd like in the design...I got some very rough estimates of costs and realised that I couldn't actually afford it, but it would have been a great place.
It had about 5 other people interested and 4 of them were developers and 3 of those wanted to make it in to 2 houses, so there were some people with a real eye for turning 4 walls and a roof into something to make money. I was sort of interested in it purely to live in...but I had looked at the rough estimated costs and realised that it wasn't for me as once I had spent the money on renovating and moving in, the monthly costs would have been high as well - not ideal for someone who has a real fear of running out of money.
On the outset from a sellers perspective an AIP (Agreement In Principle) mortgage offer really isn't worth anything. They can be obtained very easily and little fact checking is done and when they buyer comes to get a proper mortgage offer, lots can go wrong. And having had sold a house recently I had a marginally higher offer with a buyer with an AIP or a slightly lower one with 'cash' (proof of funds in accounts provided to the EA). As I wanted to get things moving quickly the slightly lower offer was the one I went with.
this... we had our buyer refused a mortgage last year as they’d lied to get their AIP! Which in turn meant our purchase couldn’t proceed 😭 Not ideal as decent properties are going so quick right now. (Although it worked out OK as we found a much better place shortly after!) So I’d definitely go with a cash offer if there were only a couple of K in it.They can be obtained very easily and little fact checking is done and when they buyer comes to get a proper mortgage offer, lots can go wrong.
That does make sense. It was the Freemasons selling it and wouldn’t have thought they were needing the money to buy somewhere else in a particular hurry.. just going into a pot of money somewhere!
I wasn’t too worried about the renovation costs to be fair. I am a stone mason by trade and most of my close friends are tradesmen who would have helped out and kept the costs low.
Got straight back on the look out for somewhere else, fingers crossed.
Cash is king. Don't worry about it, it's just a transaction. There'll be something else along soon enough and projects have a way of turning in to epic sagas, trust me, I'm in one now....