If you are trying to sell a property with structural issues or are hoping to sell an inherited residence with underlying problems, you may quickly find that this presents a challenge - at least within the conventional sales market.
There are two primary reasons a property with structural issues is hard to sell.
First, a buyer looking to purchase a home to live in may not have the knowledge or skills to manage repairs and might consider this type of project too complex to undertake.
Second, a buyer reliant on mortgage borrowing may discover that issues make it incredibly difficult to secure mortgage lending.
For most sellers, the ideal solution is to opt for a property auction, where buyers include property professionals who are well-versed in more extensive renovation projects and who will look past structural defects and see the investment opportunity presented.
Are you looking to sell a property with structural problems? Get in touch with Clive Emson today and get a FREE appraisal to find out how much you can sell your property for.
Key Takeaways
Selling a property with structural problems, such as subsidence, pervasive damp, or asbestos, presents challenges as these issues can deter typical homebuyers and complicate mortgage approval processbues.
Auctioning a property can be effective because buyers, often l renovators or investors, are prepared to take on projects with defects, focusing on potential investment returns and accepting properties "as-is."
Sellers must disclose all known defects to potential buyers as these will inevitably be uncovered in property surveys, impacting the sale process and potential legal ramifications.
What exactly does structure damage mean?
Structural damage refers to the harm or deterioration affecting the core supporting elements of a building. This damage can compromise the stability and safety of the structure and typically involves key components such as:
Foundations: Cracks or shifts in the foundation can lead to uneven settling of the building, which might cause further structural issues.
Load-bearing Walls: Damage to these walls, which support the weight of the building, can threaten the structural integrity of the entire structure.
Beams and Columns: Defects or weakening in beams and columns can impair the building's ability
Roofing Structures: Issues with the roofing structure, such as truss damage or significant sagging, can lead to water intrusion and further degrade other structural elements.
Floors and Joists: Damage to floor joists or the subflooring can cause floors to sag, buckle, or become uneven, which can affect the usability and stability of the building.
Ceilings: Similar to roofing and floors, damage to structural components of ceilings, including supports and plasterwork, can pose risks of collapse or further degradation.
Why Is it Hard to Sell a Property With Structural Issues?
Selling a property with structural problems is by no means impossible.. As a seller, you might be faced with a no-win scenario where you either:
Complete the repairs yourself, which can take considerable time and budget.
Reduce your selling price in light of the issues present.
Neither is likely appealing, but there are alternatives that may resolve the issue and allow you to complete the sale and move forward.
One point that is essential to make is that there is never a case for non-disclosure, and it is paramount that any prospective buyer is fully aware of the problems since these will inevitably be discovered during surveys and valuations.
It may not be as bad as you think, but always arrange a survey…
Some structural issues initially seem insurmountable but are actually easily overcome. It is, therefore, wise to review the survey results to understand the specifics of the problem and how much this will impact your options when it comes to selling.
For example, low-quality wiring may simply mean a new owner would need to budget for the cost of rewiring, whereas subsidence that impedes the structural integrity of the property, the presence of asbestos, or finding that the residence has been built on a floodplain may be a little more complex.
The nature of the structural problems and the anticipated cost of rectifying them will affect the price. Some homes are built on flood plains but sell quickly and with great interest due to their premium location - no two properties are identical.
What Are the Types of Structural Issues to Have in a House for Sale?
So much depends on the age, condition, and original construction of the house, and some structural issues are common in certain areas or are unavoidable.
As a rough indication, mortgage lenders are least likely to approve lending on properties that have:
Subsidence, particularly where the property is noticeably tilted or where the movement of the ground underneath the structure has caused movement.
The presence of asbestos over a large proportion of the property – the material was used as insulation throughout the 1980s and is now known to be toxic.
Pervasive damp, where this has affected the underlying structure of a timber-framed home or has caused ongoing damage to the interior, render, brickwork or plaster.
Invasive plant growth especially if a species like Japanese knotweed has been left to grow uncontrolled for an extended period of time.
This list is not exhaustive, and anything that undermines the structural stability of the property, from dampness in the eaves to a leaking flat roof, might be designated as a structural issue within a surveyor’s report.
Buyers may also be less concerned with structural problems where the property is ideal for renovation or where they would be planning to strip out old décor and fixtures or demolish a dilapidated property to start a new development.
"Selling houses with structural damage at auction allows for a straightforward transaction, bypassing the lengthy negotiations typical of traditional sales. Buyers at auction understand the potential and risks of such properties and come prepared to invest, making it an effective venue for these challenging sales."
Why Sell a Property With Structural Problems at Auction?
If you aren’t in a position to fix a structural problem or want to sell a property quickly, an auction is an excellent solution.
The buyer audience at a property auction is often very different from that of a private treaty listing, and the impact structural issues have may be minimal, depending on the factors we have discussed here. This is because:
Auction buyers typically have a higher risk tolerance than conventional buyers: The potential for a high return on investment can justify the risk associated with structural problems.
Auction buyers are focused on value: Many of the buyers who routinely buy properties at auction are renovators, developers or investors, and they may be less concerned with the structural condition of the property than they are with its location and potential future value.
Auction buyers are looking for market opportunities: A developer who is looking for plots of land or areas with existing permission to construct a residential home as a rental investment may perceive this as desirable, particularly in areas where open land is hard to come by or where planning rules make it very difficult to gain consent to build a residential home elsewhere.
Auction buyers have an understanding of costs: They often factor in the cost of necessary repairs, including fixing structural issues, and weigh this against the potential resale value. If the numbers work out, they might proceed despite defects. Seasoned investors and developers typically have a good understanding of construction and renovation costs.
Auction buyers accept the ‘As-Is Condition:’ Properties sold at auction are often offered "as-is," with limited opportunities for detailed inspections or appraisals that a conventional buyer would insist upon. Buyers at auctions are generally prepared to accept some level of risk associated with unknown defects.
Auction buyers know how to deal with common issues (such as asbestos): Whilst a property with asbestos may put off some prospective homebuyers , an experienced Auction buyer may be accustomed to dealing with the safe removal and disposal of asbestos and be keen to take on a property that could deliver superb long-term returns once refurbishment work is complete.
Expert Advice Selling a House With Defects
Our auction teams have years of expertise in marketing properties for auction sale with varied issues or defects and are on hand to offer guidance at any stage, whether you'd like to review our recently completed auctions to see how other similar properties have performed or would like an independent appraisal.
Please get in touch to discuss your property sale today, and we will be happy to offer our independent advice about the amount you might reasonably expect to achieve at auction. Find out more about selling a house by auction here.
