Some houses have serious problems.
And when you sell a house like this, you typically have three options before selling it:
- Don’t fix anything
- Fix some cosmetic issues
- Fix everything.
In this blog, we’ve looked carefully at all three approaches to selling a house with problems.
What counts as a house with problems?
Many people have different standards for what ‘a house with problems’ means.
Generally, it means: selling your property through an estate agent will be difficult.
Two common ways to define it are:
- A house most typical buyers don’t want to purchase
- A house a bank won’t lend money for a mortgage on.
There is a large overlap between these two types.
Common examples of a house with problems
Some of the most common examples of a house with problems include:
- Problematic tenants or squatters
- Structural issues (including subsidence)
- Pest infestations (including woodlice)
- Broken doors or windows
- A hole in the floor or ceiling
- Extensions made without planning permission
- A very short lease on a leasehold flat.
When you sell a house with problems, you have a legal responsibility to disclose its issues.
If you don’t, and these are revealed later, the new owners could take legal action against you.
Decide whether to fix the problems with your house
If you want to sell a house with problems, your first step is to decide whether to fix the issues with your property.
Some problems are entirely fixable, while others are not.
For example, you might be unable to evict tenants in your house legally. But pest control can be brought in to rid the property of vermin.
You should gather price quotations from multiple professionals if the problem is fixable. These should be no-obligation quotes.
Once you’ve found out how much fixing it will cost, get an expert’s opinion on how much value it will add to your house.
It needs to be worth your money. Otherwise, it might be financially better to walk away.
Even if you can make a profit by fixing the issues, some people choose not to.
This is because the time, stress and effort involved means that it’s better to ‘cut your losses’ and sell the property as it is.
Take all valuations you receive with a pinch of salt and leave a margin for error.
Decide whether to make ‘cosmetic improvements’
Your second option is to make cosmetic fixes to your problematic house. This should be low-cost.
The goal is to make your house look more appealing without fixing any of the underlying issues.
This short-term solution should be relatively inexpensive. The goal is to make the property presentable enough to list it on the market and attract interest.
You won’t be denying that the problems exist.
More minor fixes may make the major issues more manageable to potential buyers.
They won’t be overwhelmed by the terrible condition of the house. Once the job is done, they’ll also get a glimpse of the property’s full potential.
Can I sell a house with problems on the open market?
Your third option is to sell the property as it is. This can be done in multiple ways, which we’ve outlined throughout the rest of this blog.
You may be able to sell a house with problems on the open market. Contact an estate agent to discuss this.
Buyers will overlook some problems, but you need to account for this in your asking price.
Issues it’s easy to sell with
You can sell a property on the open market which has any of the following:
- Sitting tenants
- Overgrown garden
- Broken lights
- Faulty appliances or plumbing.
However, only certain buyers will be interested in a house with these issues.
For example, property investors who will pay for these fixes to sell for a profit).
Nevertheless, these people operate on the open market, and your estate agent should be able to find them.
Issues it’s extremely difficult to sell with
Some issues can make selling your house on the market extremely difficult, if not impossible.
For example, banks won’t lend money on a leasehold with a very short lease.
The same applies if it’s in total disrepair or has subsidence.
Honesty is the best policy
You should always be honest about faults with your house. It worsens things if your buyer discovers a problem you haven’t revealed.
Speak to an estate agent for guidance on the specific problems with your house and whether selling on the market is plausible.
Other methods to sell a house with problems
Selling on the open market is not your only option. You can also use other channels.
Cash buying companies
Cash-buying companies allow you to sell your house in ‘any condition’. You won’t need to spend any money or time on fixing it.
Auction houses
The same applies to using an auction house. You can list your house there, no matter what the problem is.
Just beware that it will affect the price you can expect to receive.
Selling the property privately
Selling your house privately means that you don’t use an estate agent to facilitate the sale. You can sell to anyone in this position.
Property developers and/or cash buyers might buy your house in any condition. You’ll need to find and contact these people directly.
Although there are no estate agent fees, there are other costs to selling your house privately.
How to value a house with problems
A RICS-qualified surveyor can provide an accurate valuation on your property.
This is the valuation most banks will use when discussing lending you money.
These professionals are independent and trained to consider market conditions at the time.
Take all valuations with a pinch of salt and leave a margin for error. You might want to gather several valuations to be sure of the ‘average’ figure that experts agree on.
Remember that a cash buying company or an auction house will value your property slightly less.
Speak to them directly if you want them to visit you and value your property.