Big yellow taxi - selling to developers

sallyjo_2

What is a good rule of thumb re offers for property to expect from developers who want to acquire your home/back gardens for the purpose of bulldozing and putting in several houses instead. Location - south of England (Reigate, Surrey) - plan is not for high density but estate of small detached family homes.

I have heard that 125%, others have told me to hold out for 1 and a third, some have said to insist on 150% of the current value of the house on the market as the 'redeveloped land' price.

Anyone with experiences with this process? Many thanks.

silvercar

You have to consider whether you want to sell them your garden or sell them your house. I know people who have done both.

Garden sale: Try and find the value of your house with and without the garden to calculate your loss. Find the value of prime development land. You are going to end up with some split in profit between them and you.

House sale: Value of your house plus quite a bit. I would go for 50% but that may be optomistic. Remember they will do a quick tidy on your house if needed and remarket it or knock it down and have more space for houses.

Some say that being in an essential physical position can help the sale price; a friend tried to get too high a price and they ended up redesigning the site without her and her neighbour, leaving her watch other neighbours make profits and leave.

clutton_2

have a look at their planning application and see how many houses they are planning to build - ask a couple of local estate agent how much these properties might sell for in a years time - then calculate the Gross Development Value (ie how much the developer will make when he sells all the houses.) Developers used to reckon to pay one third of the GDV for the land; spend one third on building the properties; one third profit and 10% on contingency costs.

linlin_3

clutton wrote:

have a look at their planning application and see how many houses they are planning to build .

If you do this, you'll probably find the planning application is outline only and may appear quite reasonable. Once outline is granted, there are all kinds of changes made - larger houses, boundary changes, changes to the positioning of the houses.

If you sell on the basis of a planning application, make sure the application number is specified in the contract - otherwise expect changes which could be detrimental to you.

vansboy

We could have got more for our yard (behind our house) if we'd sold to developers, wanting to acquire our land & our neighbors in one go. They would then have tried for 10-12 units to build & an access road by our house.

Instead we took less £$£$ from a private builder who is building 2 houses, on what was our land.

This way, we loose £$£$ on initiall price, but more attractive & more £$£$ selling our house, WITHOUT an access road, or so many houses behind.

So it does need VERRRRRY carefull studdies of the developers intentions.

& don't expect them to have the work done fast, either. Planning takes time, as well as the work, so expect loads delays dust n.... DOH - why did I sell!!!!

VB