Good offer or crazy scheme?

Hi - just joined to ask advice on something so I’ll get right to it;

My uncle has been trying to sell his currently vacated house for about a year now (Shankill, 5 bed, 3 reception, decent sized garden). He’s in a nursing home now and needs to sell, rather than rent to pay some major bills.

His son has been approached by a builder with an offer to build two houses in the garden. The deal is that the builder does everything for free but gets to keep one of the houses. So my uncle would have 3 houses with no back garden, where there was once a house and a decent sized garden. And he would be trying to sell two houses with no gardens, where he previously had trouble selling one. To faciliate this would also involve knocking down a huge part of the existing extension, which was build only recently, it wasn’t a great job but it would be such a waste of moeny to knock it down.

I wanted to try and keep impartial while posting this but obviously that’s not easy; the bottom line as I see it is that I don’t know why anyone would want to live in suburbia without a garden. I don’t think they’d ever sell. Would appreciate your thoughts. I can’t convince my cousin that this is a crazy idea but neither of us have done any research on wheter it could work or not to try and back up our arguments, so this is my form of research.

There are actually offers on the house, and though they have (obviously) dropped a lot recently, I’d be more inclined to take an offer and run before things get worse.

Your thoughts would be appreciated.

I would be 100% in agreement with your inclinations. It is a falling market with a looong way to the bottom, take the money and run. Whatever residual cash is left after nursing home fees etc will probably go a long way to buying a similar house when this markets finally bottoms if ownership of a house is a consideration for your cousin.

I wouldn’t know the first thing about this kind of thing, but here’s a completely outside take on it.

  1. The builder doesn’t have the money for a site in Shankill
  2. The builder thinks he has a line of credit to build 2 houses
  3. The builder needs to work, is getting desperate

I would look at the worst case scenario here. Builder goes bust when you’ve two concrete shells with a roof. What’s he securing his credit on? At what point does he own a portion of the land with “his” house on it? Could his creditors (or a bank) come after you for that newly subdivided plot?

You could end up with some concrete blocks thrown up in the imitation of a house, and the bank owning a chunk of your property.

In this climate, I’d run a mile. But then, that’s my unresearched and some what cynical view of the world

Dumbest idea I’ve heard in a long time. Houses being built in gardens is a throwback to the craziest times of 2006.

It sounds like a bad deal.

Currently: 1 good sized house with a large garden.
Proposal: 3 average sized houses with no gardens.

Builder gets to keep 1 - so:

Currently: 1 good sized house with a large garden
Proposal: 2 average sized houses with no gardens.

So he’s offering - for free - to take a good sized house with a large garden and turn it into 2 average sized houses with no garden.

Now - ball park it for the current market:

€450K for 1 good sized house with large garden.
€300K for 2 average sized houses with no garden
BUT you are now in competition with the builder - who is trying to sell the third house.

Say he want to shift it quick and so prices it at €250K.

Well now you have to reprice at €250K as he’s set the market.

Say you both manage to sell a house.

Builder gets 250K, You get 250K - but you still have a house to sell.

It needs to be at least €250K for any of the hassle to be worth it.
€200K see you at break-even
And less than that see you at a loss.

Remember the story of the dog with a bone? This is the Irish equivalent with houses.

If your uncle needs the money now I guess there’s not a lot options.

However, I think “quality” properties will be quite in demand once there’s an actual property market again. So much shite has been built during the boom that anything even a little bit nice seems to get people salivating.

Don’t let them do it. For all the reasons above, and I also believe more and more people will want and need to be growing some of their own food. You need as much garden as possible for that. And yes, anyone buying a 5 bed in Shankill will expect a garden not a postage stamp of a “town garden”. The longer you have to wait to sell the existing house the less you’ll get for it.

If sold now for whatever price, I’d imagine there would be little to no CGT if it was owner occupied.

Should this not also be a factor?

IMHO, whatever offer is on the table should be snapped up now and give this elderly man a comfortable life.

There will be no missed opportunity by declining this offer. I can say that with 99% certainty.

Also remember about planning permission. It could take up to another year to get planning permission - plans drawn up by architect/engineer, submitted to council etc, etc. And that all has to be paid for upfront. Then neighbour’s objections blah, blah blah. Ask your cousin to check with the nearest neighbours if they would be agreeable, for a taster of what the response might be. Then he could get an appointment with the local planning office and ask them for a basic opinion. He could also go to a bank or building society and ask them their opinion. If he won’t take your advice get him to at least do as much research as he can and base the decision on facts. If someone wants to buy a house it’s because they want a garden, if they don’t want a garden they’ll buy an apartment.

“Take the Money and Run” - Steve Miller.

Do not let the builder near your uncle’s house. Mad, Daft, Crazy, Mental idea.

If you have a realistic asking price below similar overpriced houses in the area that makes it feel like a bargain you will hopefully get some interest.

Or perhaps you could rent it (depends on the the condition I guess)

Personally would never buy a house without a decent garden - particularly that far out.

I’m afraid I can’t think of any reason anyone would buy a family home without a garden in Shankill - surely the reason for living that far out is to be able to have a bit of space? It could be three years before these houses are built and at that stage I’d imagine a 3-bed house in Shankill with garden would be affordable to families on mid-range incomes.

I would also say refuse the builder and take whatever offer is there for the house at the moment.

Prices are ion the way down, so with the money pay the bills and deposit the rest.

If the builder thinks the site is valuable etc… then let him make you a cash offer for the house and site and let him worry about selling 3 houses with no gardens. (you don’t want the hassle of becoming a seller of more than 1 house). Remember he is offering you a house rather than giving you hard cash. Cash is king at the moment.

Why not remortgage the property?

Hi everyone, thanks for all the replies on this, much appreciated and very useful.