How much can you get away with?
This is where it gets bloody. (That’s the first time I’ve been able to use that word in any article without it being censored). We don’t advocate shoddy, illegal, or “cowboy developer” methods. So it’s your decision how you conduct yourself.
It’s not your house, you’re not going to live in it. If you forget this fact you’re on a slippery slope. So, just what are you going to put in the house and to what standard of workmanship and just who is going to do it, you or someone you have to pay?
This last question is difficult to determine. It is further complicated if you are capable of doing things yourself. Builders cost money but (hopefully) things get done faster and you get paid sooner. If you spend time doing the work, you make more profit, but you wait longer for it. If you have no practical ability at all you are lucky, the decision is made for you.
This area…. just how far do you go?…. is where you will win or lose in the race for maximum profit. You have paid the right price for the property, you have considered any extensions etc. you are adding, you know it’s got to be decorated and have a new kitchen and bathroom…… you have accounted for all this. But right here, if you lose the plot you will come unstuck!
Buyers suffer from “human nature”. They want the best possible property but their pockets will always rule. If you are daft enough to give them loads of wonderful little extras, which you believe really “make the project”. Don’t expect buyers to want to pay for them.
What little extras will achieve though, is possibly a faster sale and that will free up your money again, to get on with the next project.
If you fall foul of a recession just as you are selling, don’t expect buyers to help you out. They will happily pay far less than you might have expected and congratulate themselves on just how shrewd a business person they are. This is business and business can be horribly brutal.
Veneer is what gives the developer his profit, so let’s be brutally honest!
There are no regulations requiring a developer to ensure the electrics are brought up to today’s requirements. They don’t even have to be tested. All a buyer sees is the lovely brushed alloy faceplates you bought from the local DIY shed.
There are no regulations requiring a developer to fit a new condensing boiler, or upgrade the heating controls, or flush out 20 year old radiators.
There is no requirement on a developer to fit loft or floor or wall insulation or lag the pipes and tanks.
Rotten and split floorboards and joists can be just supported, nailed down and carpeted over.
Walls with blown plaster can be filled and papered over. I’ve never seen a buyer tapping any walls.
Cracked ceilings and walls can be filled, lined and papered. 1500 grade lining paper is the developer’s very best friend!
The list goes on. It’s just like selling a car, the onus is on the buyer to determine the true state of his potential new home.
There are 4 “people” you have to satisfy as a developer.
1. You (and your conscience)
Homework, homework, homework. The second three most important words relevant to the housing market.
2. The Building Inspector
But he is interested in the bigger picture, size of RSJ’s, depths of foundations, that sort of thing. If you are adding extensions or fitting new windows etc, his requirements should already have been costed and accounted for, with any quotations you have agreed. In other words, his input shouldn’t either surprise, or more importantly, cost you.
3. A possible Surveyor
Firstly, only about 20% of purchasers actually commission a structural survey. That’s good news for sellers. A buyer may have to pay for a mortgage survey but these can be literally little more than a surveyor driving past the property.
Surveyors never lift fitted carpets, don’t remove electrical sockets, don’t move furniture, won’t force their way into a loft if the hatch is stuck or insulation is layered over it.
They won’t walk around a loft looking at roofing timbers if insulation is covering the joist tops. They can’t see through newly painted or papered surfaces and they certainly won’t lift manhole covers if the handles are damaged. In short, there’s not a lot they can actually get to, if you don’t want them to!
4. The Buyer
Most people haven’t a clue about assessing the structural state of a building. They satisfy themselves that it’s the right price, size and shape, that it has a garden for the dog, a handy school for the kids and off street parking. They can see it’s got double glazing, is well decorated, has a new kitchen, bathroom and carpets and that’s about it.
The veneer is all they see.
If a property is sold completely finished (including the garden), with curtains, light fittings and the odd coffee table with a lamp and a big old book on Gauguin on it….. but with no other furniture…… it will look twice as big as it is and send Mr & Mrs Youngcouple into raptures of delight.
They are looking at 4 other properties that day, their memories will be a blur when they get home. Your lovely clean shiny house with it’s minimalist, brand spanking new décor will be all they remember.
Most of the time!