Property Developer wants my house.....what to do?

IJJoseph

There are three properties on my side of my road and I believe a local developer bought or is intending to buy up the vacant detatched property on one side of me.

I recently received a letter requesting to speak with me regarding the "potential" of my land for development. I believe my neighbour has also received such a letter but I have not had the opportunity to ask him yet.

Yesterday an estate agent knocked on my door and asked me if I'd received their letter and so I stalled them by saying that I was still working my way through the mail (which is true as I had been abroad).

I know from talking to the previous owner of the vacant property that they want to knock down the three houses and build flats in their place. There is certainly sufficient land as I have a 4 bed semi, my neighbour has a 3 bed semi and the detached property has to be between 10 and 16 bedrooms.

My question is, has anyone any experience of dealing with property developers? What do I need to be careful of?

I'm not totally sure I even want to move yet to be honest.

The letter states that the estate agent would value the land which would be realistic and fair to me but the value of the land is different to the value of the house. Furthermore, the value of the land to the developer is different to the value to me (I know they'll be looking at market values but even so I feel that it's still relevant). Finally I think it will be very difficult for me to buy another property of similar size (I extended it out the back and on the side) with a similar plot in my area without increasing my mortgage by about £100k - £150k.

Any advice, pointers or experiences would be greatly appreciated.

MORPH3US

Looks like you would be in a strong position mate, just make sure you get your own valuation done so you know they aren't ripping you off. Then whatever its worth, whack a good 10 / 20% on the top (for your inconvienience) and tell them thats what you'll sell for - if you want to sell that is!

Please bare in mind that that is what I would do, but I have no prior knowledge / experience so take my advice with a very big pinch of salt!

M

Astaroth

It is a good possition to be in... get your own choice of estate agents to do a free valuation of the property (say you are thinking of selling - dont mention the developer) and then add a premium on top of that. See what the developer offers initially and take it from there.

A developer will be looking at it as a business proposition and so will not have the often "fall in love with it" and offer full asking price so no one else gets it reaction. If yours is the last one to have a sale agreed then you may be able to push the price up further because it may limit/ stop their plans if they cannot get all the properties they need for their plans (of cause the flip side is that they decide not to buy yours as the price is too high but build tower blocks next to your property causing a devaluation so dont be too greedy)

As a business proposition their first offer certainly wont be the highest they can go to and they are out there to make money not friends so may use all the tactics that a buyer can to get their best deal.

silvercar

We were once approached by developers. They were offering 20% over agreed market value.

I think you ned to find a property of similar value to your own (value to you rather than monetory value) then add 20% for inconvieniance.

The thing to watch out for is that they may well want you to sign up now to sell in a year or more hence. You would be agreeing now to the value of your property in a years time. You would also be commiting to move when you don't know what property will be available on the market at that time. They will also want to exchange subject to them obtaining planning permission. This will prevent you from selling to anyone else in the mean time if you needed to move.

What you want to insist on is a window of time to complete in, of a few months, to enable you to have a smooth move, a profit for all the hassle, a moving package for all the costs of moving and a facilitator to assist you in sorting out the move.

Remember they are doing this to make a profit themselves; make sure you get your share!

Only do this if its worth your while and you can see yourself living elsewhere.

nej

Make sure you get them to pay all costs of moving, including all solicitors fees, conveyancing fees, building surveys, seaches, removals, stamp-duty etc.

And as they aren't interested in the property, only the land, make sure you sell everything you can, or at least take it with you. I mean everything, light fittings, curtain rails, electrical sockets the lot.

linlin_3

Check the deeds of your house. Download the deeds of the neighbouring houses. You need to check for restrictive covenants. If you decide NOT to sell, you may be able to prevent development in the area if you have the benefit of a RC......on the other hand, you can "sell" your benefit for suitable consideration.....but only by deed with the planning application number!!

I thoroughly agree that you should get your own independant valuer. If you decide to sell, add, add, add and bargain, bargain. IF they strike a deal, they'll offer you an "option to purchase". You'll get about £1 and if their outline planning permission gets through, they may then proceed and you'll have sold your home.

IF you decide to bargain with them, add to the negotiations: timescale; moving costs, legal fees; and anything else you can think of.

Do NOT trust the developers - they are NOT nice guys!

payless

the wording makes me wonder if they are after a bit of your garden rather than the whoole lot ?

IJJoseph

Neighbour has returned and he too has received letter regarding land......If developer needs both then we are in a very strong position.

Are we able to say to the developer.....go ahead and apply for planning permission but we'll agree a price once you have it because we don't know what market conditions will prevail and we do not want to be stuck in a position where we have to sell and we have to relocate even if market conditions are unfavourable......my logic is that they are the ones looking to make the quick buck....why should I take the risk???

Snow_Dog

The other thing to do with them is the planning permission may take some while to go through depending upon their plans, I have heard of a local developer to me who was actually paying a friends father £1K pcm to not sell his property while pp was being sorted (the developer wanted the land only if he could get pp), in a development of say a couple of small blocks of flats paying out 6K over 6 months is small change.

The other thing to consider is if you neighbour sells and he has the other large property and your neighbours, its not nice but he could drive you out with dodgy tenants etc. Sorry to paint scary picture but people get real ugly when large amounts of £££ are involved.

kit

I agree with the above post..... bear in mind that they may go ahead and build flats on the plot of the detached property anyway... how would you feel about living next to that?

Think carefully..... its a big decision to make.

clutton_2

it might be helpful for you to calculate the Gross Development Value (GDV) - ie what the whole site will sell for when all the flats are built and sold on. Developers traditionally have paid 30% of GDV for the land, 30% for the build cost and 30% profit, with 10% for contingency costs. in recent years, development like this has become much more difficult to make good money at, and some developers will now pay up to 40% of GDV. The other alternative is for you to apply for outline planning permission yourself, then, you have a much more desirable and expensive product to sell, and a developer who bought it with PP in place can start work much sooner.