Selling a hard-to-sell home

A home is usually “hard to sell” because buyers’ mortgage lenders will not lend on it, or will only lend on strict conditions, which leaves a much smaller pool of buyers who can pay cash.

Why do mortgage lenders turn some homes down?

When a buyer applies for a mortgage, the lender instructs a valuer to check that the property is good security for the loan. Each lender then applies its own criteria. If the valuer reports something that could affect the value or future saleability, the lender may refuse, lend less, or hold back part of the loan until work is done.

Government guidance for Right to Buy purchasers, for example, warns that some lenders do not lend on flats in high-rise blocks or blocks of non-traditional construction. The RICS standard on Japanese knotweed expects most lenders to require a professional treatment plan where knotweed is damaging a structure or restricting use of the garden.

Common reasons a home falls outside lenders’ criteria include:

• a lease with around 80 years or less left to run
• tenants with strong rights to stay
• concrete, steel or other non-standard construction
• Japanese knotweed on or near the property
• subsidence or other structural movement
• cladding or fire safety problems in a block of flats
• serious disrepair, or fire, flood or damp damage
• a high flood risk or a history of flooding
• missing deeds, unregistered land or other title problems
• ex-council flats in blocks some lenders avoid

Why can cash buyers still buy these homes?

A cash buyer does not need a lender’s approval, so the problem does not stop the purchase. Many property investors are used to extending leases, arranging treatment, taking on tenants or dealing with repairs. But the buyer takes on the cost, the time and the risk, and prices all three into the offer.

What does that mean for the price?

Be prepared for this: offers for hard-to-sell homes are usually well below the price of an equivalent home without the problem. A quick sale to a cash buyer also generally means accepting less than full market value in return for speed and certainty. Our guide to how much cash buyers pay explains how buyers work out their figures.

It is not always the right route. Sometimes fixing the problem first, or selling through an estate agent or at auction, will produce a better result. Our comparison of cash buyers, estate agents and auctions sets out the trade-offs, and how it works explains our role: we introduce you to buyers on our panel, and never buy or value homes ourselves.

The guides below explain each problem in turn. If your home simply has not sold and you are not sure why, see house not selling.