Developers want to buy our house..

Lucyannexxx

Hi, any advice on this would be fantastic!
My parents own a 3 bed semi in a bromley borough and were approached nearly 4 years ago now by developers wanting to build up the whole road (a total of 10 properties, 4 of which are council owned). Their plans included 103 flats spread out over 4 storeys and 4 separate buildings. This was in partnership with the local housing association and a building developer. So as you can imagine a massive project! My parents signed an option agreement originally for 500k, after a year the agreement ran out due to the planning process taking longer and due to my parents circumstances (massive mortgage due to remortgaging and illness) they were then offered 650k. The plans went in and were rejected by a panel, so this then went to appeal and this was also rejected due to the sheer size of it. However the option for 650k runs out soon and they are now being asked to sign again until December so they can draw up new plans in accordance with what it was rejected on (basically 4 storeys was deemed too high and over looked neighbouring houses).
This has been going on for so long and their mortgage terms means it's is due to be paid fully in 2.5 years, by the time my dad turns 65. One of the neighbours refused to sign again last time and for fear of losing it the housing association bought it for a massive amount, what do you think the best option is?
To not sign and open up the opportunity for other developers in the hope they but the property quicker than having to wait until December with no guarantee planning for these new plans will be granted,
Or
Call their bluff and not sign before the agreement runs out and hope they buy it quickly like they did the neighbours?
Thanks

Tom99

Do your parents get paid for granting these options? If not what's in it for them?

Presumably the developer does not have to action the option they could say we have PP but can only offer you £550k.

Norman_Castle

Call their bluff and not sign before the agreement runs out and hope they buy it quickly like they did the neighbours?

Offer to sell it to them now. Explain they are willing to sell for an appropriate price.

Lucyannexxx

Hi no they get nothing in their favour every time the re sign, tbh they are so desperate to sell they willingly sign each time the option needs extending. This time I've told them there's no guarantee planning will be granted if they do extend so atleas ask for more money or be persistent that they need to buy the house before it runs out.
The developer is good at manipulating and always comes to my parents first as he knows they are desperate, hence the reason I said call their blufff and don't give them what they want to easily

Lucyannexxx

My dad said to them they need to just buy the house now but the developer came back and said basically the housing association are thinking of pulling out seeing as their plans were rejected and that if you all don't sign then it won't go ahead, making out like he's given them a lifeline and persuaded the housing to carry on if he can get extensions on the contracts. However he said they have already looked at plans for building 50 houses instead of flats so they obviously can't be that keen to suddenly shut it all down !!!55357;!!!56900;

ProDave

This sounds like shares in a company with a takeover bid, the share price rises.

Likewise this property has development potential; so will be worth more than an "ordinary" house of the same size.

I see two options, to be straight with the developer and tell them you need to sell now, but as soon as they see you are desparate, might reduce their offer.

Or speak to an estate agent and see what they think it might sell for on the open market, given it's development potential.

When they do sell, what will they do? they still need somewhere to live? How about suggesting to the developer they buy it, then allow your parents to remain as tenants until they are ready to start the development?

davidmcn

Given the amounts potentially involved, I would it worthwhile that your parents seek professional advice (from surveyors - your bog standard estate agents are unlikely to have expertise in development site assembly) about how best to negotiate this.

eddddy

Tom99 wrote: »

Do your parents get paid for granting these options? If not what's in it for them?

Presumably the developer does not have to action the option they could say we have PP but can only offer you £550k.

Lucyannexxx wrote: »

Hi no they get nothing in their favour every time the re sign...

It's usual for the house owner to only receive payment of £1 for the option.

The 'deal' is typically something like this. The developer says:

• "Your house is worth, say, £500k as a house."
• "I'm willing to spend £20k+++ trying to get consent to build flats"
• "If I get consent, I'll pay you £650k for your house."
• "But you have to sign a legal agreement saying you will not sell to anyone else except me for 2 years - while I try to get planning consent"

So the house owner signs the option agreement in the hope of getting a £150k windfall profit.