How do you value an unfinished property?

[Elm1972]

I am thinking of selling a property I have inherited.

It is a 1 bedroom (with additional study) house with own front/back gardens, which is approx 80% finished.

Someone has now expressed an interest in buying the property but I am stumped as to its value.

Are there any companies ou the which specialise in the valuation of this type of property (the local estate agent told me he had no idea and I should 'ask a builder'!).

Any ideas would be much appreciated.

[David Black]

Work out the price if finished to a reasonable standard.

Deduct the costs of the required work and include all your time costs, yes the real numbers!

Then apply a discount of between 15% and 40% to the net value.

The figure should come out low as the owner has no rental alternative to choose.

Remember be harsh its a buyer's market.

[buildersmate]

I think the above responder mis-read your question - you are the seller and not the buyer.
His advice is absolutely correct though (and this is to your disadvantage).
You would be far better off completing the building before selling it.

[Elm1972]

Thank you for your responses.

Unfortunately I have no funds available with which to finish the build. I know this would be the best way to continue but it is impossible.

I really just want to get rid of the property and, as it was inherited, I won't be losing any money in the process. I would actually be quite happy to sell it for the price it cost to build plus a bit extra on top.

Let's say the build has cost around £85,000 to this point (including all building work, architect fees, council planning fees etc) what would be a reasonable amount to add to this?

[ELVIS68]

Go on right move.co.uk and see what other properties are selling for in that area

Try another estate agent, but to be honest, to get the best price you should really finish the build

[buildersmate]

Elm - no, it's the other way around.
Get a clearer idea of what it would be worth if it was finished, then deduct the cost of a builder finishing the job. You would be well advised to get quotes for this (without actually mentioning you don't have the money to do it). That, then is the absolute maximise you could expect - though the figure will have to be reduced to account for the 'inconvenience' factor of someone having to finish it.
What cost has already gone into the build to date is somewhat irrelevant.

[Elm1972]

Ah ok, thanks everyone.

So...... selling price of finished house - cost of finishing the build - time/profit/inconvenience factor = asking price!

The first two I have a good idea of - £180,000 selling price for finished article ......£40,000 to finish the build.

It is the last part that I will have trouble with......I guess I will have to ask a few builders round to give me their honest opinions on what would be a reasonable amount to take off the price to account for profit, time factor etc.

Many, many thanks for all your help.

[buildersmate]

No, the £40k should be the figure a builder quotes you to finish the job, including his profit margin. That's the only interest he has in doing the job - what he can get out of it. It matters not to him how much it is worth or how much you might be able to sell it for.
Based on what you have now said about market price, it if is true there is £40k of building work to do on it, I would have thought you should be trying to market the property at £130k, to try and get £120k.

[buildersmate]

£40k to finish a one-bed house sounds quite a lot. I assume it is just a watertight shell with no internal work done apart from 1st fix plumbing and electrics perhaps?

[Elm1972]

Yes, it is a watertight shell, stairs are in, all rooms have been divided, no electrics yet or anything (plus the back garden still looks like a building site!).

The person who said it would take around £40,000 to finish said they would need to totally change the internal layout, move the stairs, change layout of all the rooms, fit out the kitchen/bathroom and that type thing.

I have managed to get my hands on the original builders contract and it would suggest there was about £25,000 of work left to be done (excluding kitchen units/bathroom suite) but including fitting the kitchen, central heating and all decorating.

I should fess up at this point and say that the person who is interested in buying the property is in fact said 'builder' who built the bloody thing in the first place and he is also the one who claimed it would cost him £40,000 at least for him to finish the job. He says he doesn't like the layout as it is and would have to 'rip it all out' and start again. (In fact he originally stated it would cost him £60,000, I told him he was taking the p*ss so he 'revised' his figures). At this point I had not seen the original contract between him/deceased so had no idea of actual costs involved.

He also disputed the £180,000 market value figure saying no way would it sell for that if it was finished.

I AM NO GOOD AT ALL THIS!

I can't negotiate for toffee, I am too honest and I take peoples word when they tell me that 'x' will cost this much and 'y' isn't worth that much.

I think the fact that I now know the actual original figures to finish the build (which were written by his own fair hand!) will be my starting point with this and I will just take it from there.

[buildersmate]

Well without knowing too much about your situation, I have surely demonstrated to you that you are being taken for a ride.
Do you seriously think he is going to rip it out and start again?
You do not want to be selling it to this man