Selling an Unmodernised Property
What’s the best way to sell an unmodernised house or flat? And should the seller carry out any improvement work before selling? Read our useful tips and advice.
Selling an unmodernised house or flat: How to achieve the best sale price for an unmodernised property? And is it worthwhile carrying out any improvement work to a property before selling? This article is intended to help property owners involved with the sale of an unmodernised house or flat.
Updated by: Mark Grantham on 29th May 2022
Don’t let the description “unmodernised” be used as an unfair reason to undervalue your property. And certainly don’t let it be used as a reason for a prospective buyer to reduce their offer after a survey.
Whilst the condition of a property is something prospective buyers will consider when assessing the value of a property, it’s often used unfairly as a reason to negotiate a price reduction, sometimes many months after an offer was initially agreed.
“Don’t underestimate the value of an unmodernised property.“
The private treaty (estate agency) method of sale in England and Wales is considered inefficient, even at the best of times. And when selling an unmodernised property, it’s not just inefficient, but unfair. The process protects the buyer of a property, at the expense of the seller. Buyers often make the most of the system, by using any problems with the property, it’s current condition, or higher than anticipated cost of improvement work as a reason to re-negotiate on price at the eleventh hour.
“Estate agency sales protect the buyer, at the sellers expense.“
It’s not the estate agents fault. And the buyer might have the best intentions. It’s the system that lets things down.
Solicitors, asset managers and property investors involved with the sale of unmodernised properties, know why auction is the better option. There are several good reasons why so many unmodernised properties are sold by auction, rather than an estate agency sale.
Why sell by auction?
✔ Sell to the highest bidder
✔ Sales don’t fall through
✔ Property “sold as seen”
Before rushing into accepting an offer received through an estate agent, it’s worthwhile looking at some examples of unmodernised properties that have sold by auction. And learning about the important differences between an estate agency sale and an auction sale.
1) The starting price – the minimum price the property will be allowed to sell for. This is known as a reserve price. Although prospective buyers will not be informed of the reserve price, they will be told about the guide price, which gives them an indication of what level the reserve price is.
2) The timescales – a date is set for prospective buyers to bid. On that date (auction day), buyers compete against each other. The property is sold to the highest bidder. And “sold” really does mean sold; contracts are exchanged and the buyer pays a 10% deposit. The standard date for completion of sale is 28 days after auction day.
3) The contract – along with information about the property. This takes the form of an auction legal pack (all the legal information about the property, searches, property information forms etc) prepared by the sellers solicitor. Prospective buyers will also be provided with a description of the property, photos and a schedule of viewing dates, allowing prospective buyers the opportunity to view the property before auction day.
“With an auction sale, control is switched from the buyer to the seller.“
Selling by auction makes a refreshing change, there are no protracted negotiations or sales falling through. With an auction sale the property is sold to the highest bidder and the sale is legally binding. There is no opportunity for the buyer to reduce their offer or back out of the sale.
If you need any assistance selling your unmodernised property, please contact us. We’ll be happy to help.
Selling a property by auction is very easy. And costs less than most people think – the commission is typically around 2% +VAT of the final sale price. That’s not far off what you might expect to pay an estate agent.
Unless you have some experience of building or renovation projects, it’s usually best not to carry out any improvement work before selling.
The only work that’s recommended is preventative maintenance, for example clearing or repairing a gutter, where the cost of repair will be small compared to the cost if left unattended to. It’s also worthwhile keeping the garden tidy.
Reasons not to carry out improvement work before selling:
1) Let the buyer refurbish the property according to their own taste and specification. It’s potentially a waste of time and money to carry out any improvement works before selling. If you were to decorate the property with a basic brand / standard-quality paint, the new buyer might prefer a high-quality paint, and maybe in a completely different colour!
2) Unless you’re a builder or carpenter yourself, there’s a good chance the buyer will be able to carry out improvement works more cost effectively than you can. They might be in the building trade themselves, or know people who are.
3) Projects very often run over budget and over timescale. Don’t let the delays of an improvement project slow down your sale. Let the buyer carry out improvements in their own time. They might decide to improve one room at a time, over the course of many months, or even years.
With an auction sale, the emphasis is on the potential of the property. And that’s what drives the price upwards! If one buyer estimates the cost of work is £30,000 other buyers might feel £10,000 is more realistic, and so they’ll bid higher.
Guide to selling a house by auction
Explains the stages involved in an auction sale. With information about auction sale costs, timescales and the process for selling at auction.
Carry out improvements before selling?
When selling a property in need of improvement, should I spend money on refurbishment works? Or leave the property as is, and let the new owner take care of improvements?
Poor condition property: Auction VS Estate Agent
The private treaty method of sale isn’t suited to some types of property – it’s inefficient and potentially open to abuse.
The rules of an auction sale mean that buyers must compete to purchase a property. And the highest bidders offer is legally binding – there is no opportunity for them to reduce their offer.