Valuing a house – best method

We are buying my mother’s house. I know rife with family politics but ‘should’ be good for everyone.

Thing is, it’s tricky to value. It’s a house in the middle of nowhere in the highlands. It’s got some lovely positives (like being pretty big and quite pretty) and some negatives (on a ‘highlands style’ A road; a gravel quarry has just been given permission to be developed less than a mile away and whilst perfectly livable its not been decorated in over 20 years and needs the layout changing to modernise). The bigger issue is we are not buying all of it. A holiday cottage was built in the garden from an old stone barn and we are only buying the house. There will be access rights across our property in the future if it falls into 3rd party hands although she is keeping it for the moment. The two of them are pretty close together (10 yards). It’s been on the market for years (7) as complete package without a sniff of interest. I think separated it would sell relatively easily. The holiday cottage is arguably worth more than the house as it’s almost as big and v modern inside.

So given the tricky and pretty unique setup and situation we have tried to get it valued – don’t want to rip her off but at the same time can’t afford to pay more than it’s worth. You can’t look at what it was bought for and apply a multiplier for house price increases in the last 15 years – as it’s simply not the same property anymore. 3 estate agents, all of which have tried to sell it over the past few years, have valued it – with wildly different results! One is claiming it’s worth 60% more than the other two. I get the impression the first two were lazy and just took the offer price for the two together and halved it, whilst the other went very best case and ‘sold’ the price as the best she could make for my mother. It’s a remote spot – that’s all the estate agents used up.

Are valuation surveys worth anything? Especially for properties that they can’t find president online for similar down the road very easily. I get the impression they don’t often even visit or if they do get out of their cars.We might just have to have a grown up conversation but fear resentment will creep in that the price was too much or too little.

3 valuations go with the average

Tricky – only the market can decide it’s real value.

What can you afford, and what will she accept?

3 valuations go with the average

I think that would be my thoughts when the situation is ‘normal’ and we did the same selling our house in the summer. 3 valuations came in within £20K of each other. But in this situation the variation is £130K! – a 60% increase from the bottom 2 to the top one. Clearly 2 are wrong or 1 is wrong – or they are all well out.

What can you afford, and what will she accept?

To be honest we can only probably afford say £20K more than the bottom two but that’s also all it’s worth to us too. And I know she would accept that. But I really don’t want to potentially be stiffing her north of £100K as she needs as much as she can from the sale too for the next phase of her life.

Think you’ve nailed it with your first sentence there.

If its not sold for 7 years, then presumably the base price + £20k that you are prepared to offer is better than she is likely to get any time soon?

Or have I misunderstood and is it only the combined both properties that have failed to sell?

In which case, could you put it on the market at the higher value and see how much interest it generates? If it doesn’t sell or you only receive low offers then you can then go with your price knowing you have tried to maximise the value.

If its not sold for 7 years, then presumably the base price + £20k that you are prepared to offer is better than she is likely to get any time soon?

Or have I misunderstood and is it only the combined both properties that have failed to sell?

Sorry, should have been clearer. She has not been prepared to split them to sell them until now. She didn’t want the faff. I’ve spent the summer getting the split in the deeds sorted for her (and a change of use planning permission and a change to driveway that the permission required).

So it’s not been tested on the market as two separate properties. I’d buy the both, but I can’t afford it. I want her to have a property of her own and a (small) income too so it seems to work if the number work and no one looks to be doing too well out of it.

Main issue is that you both see it as a fair deal, and any siblings don’t think you are getting too good a deal.

My SIL suggested we buy MIL’s house a few years back, but it needed loads of modernisation. We refused. As it is, the house is now empty and it being used as collateral for nursing home fees, which will mean nothing left on sale.

I think that would be my thoughts when the situation is ‘normal’ and we did the same selling our house in the summer. 3 valuations came in within £20K of each other. But in this situation the variation is £130K! – a 60% increase from the bottom 2 to the top one. Clearly 2 are wrong or 1 is wrong – or they are all well out.

So get a fourth and throw away the outlier?

Pick fair and local (as you can) valuers

When we bought off market on three valuations, i didnt realise at the time that the seller has picked Hamptons as one who are very high pricers initially.

Give a criteria for the valuation to help tighten things up e.g. for a sale within x weeks, cash only etc

Auction it, bid as high as you are prepared to pay.

Do you have siblings (where might the resentment creep in from)? How quickly do you and your mother need to sort out a price? If it’s not urgent could you just list it with the higher valuation agent for a few weeks and see if there’s interest? I guess if there’s no interest that only proves the one agent valued too high rather than give you a guide for how to value it though.

You could always just offer the lower value but have a condition that if you sell it within the next 10 years at a huge increase you’ll split profits (minus any refurb costs you incur) with your mother.

Did you get estate agents to do the valuations, or Adidas you pay for a RICS qualifier valuer?

The latter is a better option and should take into account the access rights issues etc.

Valuations are always subjective, and for unusual properties without similar translations or having been tested on the market this is especially true.

If you have two valuations at the low and one at the high – offer your low + £20k you’re prepared to offer as a suitable mid point.

Are there any other family members who might perceive unfairness you need to consider?

3 valuations and average (or higher) would be my option if I was selling a standard house. But that’s not a standard situation. See if you can get a 4th (as above) – definitely local knowledge but not beholden to you for a fair valuation – honest (with working out) would be best.

Where might it be @convert – maybe some locals here might be able to suggest surveyors (like off Allied Surveyors and other more local indy outfits).

or Adidas you pay for a RICS qualifier valuer?

They’d be well trained.

Are you need to get a mortgage on the property? This can be more of an issue than having an offer accepted.

We live in a rural location we offered less than the asking price yet the mortgage company still said the house wasn’t worth what we offered. 2 mortgage companies later we finally got a mortgage

Value the holiday cottages and pay the difference between the full package (which didn’t sell) and the value of the holiday cottages independently.

Thanks for some great thoughts.

Where might it be @convert

Between Grantown on Spey and Nairn. I’ll PM the rightmove link to anyone interested (tbh would not take a genius to find it) but rather not plaster it on here.

Are you need to get a mortgage on the property?

Fortunately no

Do you have siblings (where might the resentment creep in from)?

Yes, one sibling but tbh she is pretty much over the moon Mrs C and I are planning to move up and will be near the old girl as we are all about 600 miles from her at the moment.

Auctioning it is probably not a plan not least because a big chunk of value would be lost but putting it on the market at the higher value for a few week might be.

Value the holiday cottages and pay the difference between the full package (which didn’t sell) and the value of the holiday cottages independently.

Is actually a pretty good idea. I pay all the costs for all the work done to split (legal and physical work) and she is left with a market value property. Think about it from the perspect if what she is left with more than what she is selling. Or at the very least do the numbers both ways and see how close it is to sensible.

You could always just offer the lower value but have a condition that if you sell it within the next 10 years at a huge increase you’ll split profits (minus any refurb costs you incur) with your mother.

Or this.

I think a qualified valuer might still make sense.

Thanks again.

Maybe you are over thinking it.

If your sibling is happy and your mother is happy just do the deal at what you can afford.

Sounds like you will be doing bulk of the care of mother in her old age if your sibling lives away, and she will get family living close.

You can’t put a price on that.

Maybe you are over thinking it.

This is my special super power! :)

we can only probably afford say £20K more than the bottom two but that’s also all it’s worth to us too. And I know she would accept that.

Seems to be a fairly obvious solution here then. If hypothetically your mother wasn’t prepared to accept that figure, what would you / she do? The house would be back on the market doing exactly what it’s been doing for the previous seven years.

Speaking as an only child, I wouldn’t give a shit what a sibling thought. You’re buying a house, your mother is selling a house, neither of these things are anything to do with her. If she were selling to you for £1 then it might be a different story though. (-: In any case it sounds like she’s not fussed so it’s a non-issue here.

Value the holiday cottages and pay the difference between the full package (which didn’t sell) and the value of the holiday cottages independently.

The flaw here may be that the package may be more (or less) than the sum of its contents. Eg, the presence of a holiday home in your front garden owned by someone else could devalue the main property, so calculating it this way could return an artificially high value.

… maybe. I know nothing about property, I’m just looking at the logic.

I really don’t want to potentially be stiffing her north of £100K as she needs as much as she can from the sale too for the next phase of her life.

Consider, if in the next phase of her life it turns out that she needs £100k and you’ve got it lying around burning a hole in your pocket, you could give it to her then instead.

@Cougar, siblings can cause lots of issues, and their kids too. My MIL is in a car home, but one sibling has all the jewellery, we’ve taken a TV we bought, now one of the other siblings is moaning we have the TV (there are others) – she says her TV doesn’t work – it does, she has never bothered to fit an ariel, so how this or the ‘other TV’s in MIL’s house would suddenly work. Other sIL’s son is taking a load of white goods.

This is just over a TV. One Sister has already had a nearly new top of the range Prius in her father’s will, my wife got nowt ! It’s a minefield.

OP just make sure mum and sister are happy with the deal, and don’t kill yourself financially – you could always ‘adjust’ any inheritance in future.

‘My MIL is in a car home’ where she gets waxed and well serviced.

Sounds like you need to bring the other sibling into the decsision making process with full visibility of the issues you outline here.

Sorry I cannot comment on valuations but whatever you do make sure it is market related and well documented as if your mother passes on in the next 7 years you may have to convince the hmrc it was not a below market sale.

I nearly bought my mother’s house for what she thought it was worth, turns out it’s worth about 150k more. The deal would have stuck out like a sore thumb and she would have been taxed in the event of death, at mrket value.

That and I have a few brothers and a sister.

Get an independent valuation. You can ask estate agents as well, but an independent valuation will allow you to explain to others that you paid a fair price for it (assuming you agree a price near the valuation). For the cost, I think it would be worth it.