Selling part of garden to neighbour - Looking for some advice

Rankin21

Like others have said I think you need to have a serious think and decide on 2 factors
1: do you actually want to sell it
2:how much do you want for it 

The go from there really- it’s hard to say if the 5k and all costs is reasonable because it’s more of a lifestyle choice of what you would do with that space and how long you intend to live in the house for.

Our neighbours approached us to buy some of our Garden- they have an incredibly small plot compared to rest of the houses here.so totally understandable why they would want it. The way we looked at it was this house is our forever home so even an generous offer isn’t really much when you compaired it to not having that space for the next 30yrs or whatever. So we politely declined.  

There’s no harm in ever asking but I think it’s worth having a proper think about it in the long run I think in the first instance it’s less about money  more about a lifestyle- could you live with out it? If so at what price? 

Good luck! 

kipsterno1

If that was my garden and I was selling I wouldn't sell the highlighted rectangle. My preference wold be to make the boundary on the diagonal, it just looks more natural.  I would also want reassurance of what the land can and can not be used for.

74jax

kipsterno1 said:

If that was my garden and I was selling I wouldn't sell the highlighted rectangle. My preference wold be to make the boundary on the diagonal, it just looks more natural.  I would also want reassurance of what the land can and can not be used for.

@kipsterno1 I much prefer the rectangle, it makes the garden a straightforward 4 fence garden. A diagonol would be weird... The houses either side aren't diagonal 

roryfraser91

Hi All, sorry for the major bump in this thread! So far we still haven't sold. As previous posters have said we are willing to sell this part of the garden for the right price, as we do not use this area, we just felt an initial offer of 5k was well undervalued even if you were just going on price of land per m2.

I've copied part of an email as how the initial price was got to with the previous tenant:

Hi,

 

The initial £10k valuation came from 'estate agent name'; the estate agents on the high street. I will get in touch to see if by any chance they kept a copy of the letter they sent me.

 

Essentially, the logic they applied was to estimate the impact of the change to value of adding the land to our property and considering any reduction to the value of yours. Their point of view was that given the length of your garden it would have negligible impact to the value of your property and that it would add approx. £10k to the value of ours.

 

To that £10k they applied the ‘marriage valuation’ logic, commonly used in leasehold extensions, to say that the purchase price should be approx. equal to half of the increase in value to the buyers property.

 

Ultimately this is just guidance as there’s no formal technique to value the land either of us can find, so there’s really only the value of what it’s worth to you and what it’s worth to us in the equation. If the two are close it might work out, so lets discuss and tell me what you have in mind and I’ll be open and tell you if that’s something I’m prepared to pay or not. I’m around tomorrow afternoon and Sunday afternoon if either works for yourselves let me know and I can pop over again

I don't understand why a marriage valuation logic was applied as in my research it seems completely irrelevant here. 

As far as surveyors go i have been searching far and wide on the RICS website and have the same response from pretty much from everyone that they do not survey gardens for this purpose/small parcel of land and are more interested in surveying land that can be developed.

Therefore like people have said i think it is going to be a process of negotiation. 

I'd just like to say thank you for people's initial input so far and i will let you know the outcome.

GDB2222

Marriage value doesn't come into it. 

You need to estimate how much the neighbour's house will go up in value. There's no good reason why your neighbour would want to pay you more than 100% of that, but I don't see why they should pay you much less.  His estate agent has dutifully suggested 50%, but that's just hokum.

I suggest that you ask another estate agent what he thinks, because he might come up with a very different base figure than £10k.

eddddy

roryfraser91 said:

Hi All, sorry for the major bump in this thread! So far we still haven't sold. As previous posters have said we are willing to sell this part of the garden for the right price, as we do not use this area, we just felt an initial offer of 5k was well undervalued even if you were just going on price of land per m2.

I've copied part of an email as how the initial price was got to with the previous tenant:

<snip>

The approach described in the letter would be a standard RICS approach to valuation.

In simpler terms:

• If you lose that part of your garden - it wouldn't reduce the value of your house at all.

• If they gain that part of your garden - their house would increase in value by £10k

• So transferring that part of the garden results in 'free' profit of £10k 'out of nowhere' - that free profit is called the marriage value.

So your neighbour is saying - let's split that 'free' profit. If I give you £5k - that means we each make £5k.



Firstly, I suspect that the EA has undervalued the marriage value at £10k

Secondly, that doesn't seem a good way to agree a price in this case.

The real question is: how much is your neighbour prepared to pay to have a larger garden? Is it £10k, £20k, £30k, £40k?

No RICS valuer can tell you that, because no RICS valuer can read your neighbour's mind. So you just have to negotiate with your neighbour to get the best price that you can.

robatwork

Have you had your own survey yet?

It's a lot easier to negotiate face to face in a friendly way if you have a piece of paper saying the land value is £15k or £10k

rexmedorum

Also: make sure it's truely all cost and fees, including also costs of redoing fences etc.

NameUnavailable

roryfraser91 said:

Hi All, sorry for the major bump in this thread! So far we still haven't sold. As previous posters have said we are willing to sell this part of the garden for the right price, as we do not use this area, we just felt an initial offer of 5k was well undervalued even if you were just going on price of land per m2.

I've copied part of an email as how the initial price was got to with the previous tenant:

Hi,

 

The initial £10k valuation came from 'estate agent name'; the estate agents on the high street. I will get in touch to see if by any chance they kept a copy of the letter they sent me.

 

Essentially, the logic they applied was to estimate the impact of the change to value of adding the land to our property and considering any reduction to the value of yours. Their point of view was that given the length of your garden it would have negligible impact to the value of your property and that it would add approx. £10k to the value of ours.

 

To that £10k they applied the ‘marriage valuation’ logic, commonly used in leasehold extensions, to say that the purchase price should be approx. equal to half of the increase in value to the buyers property.

 

Ultimately this is just guidance as there’s no formal technique to value the land either of us can find, so there’s really only the value of what it’s worth to you and what it’s worth to us in the equation. If the two are close it might work out, so lets discuss and tell me what you have in mind and I’ll be open and tell you if that’s something I’m prepared to pay or not. I’m around tomorrow afternoon and Sunday afternoon if either works for yourselves let me know and I can pop over again

I don't understand why a marriage valuation logic was applied as in my research it seems completely irrelevant here. 

As far as surveyors go i have been searching far and wide on the RICS website and have the same response from pretty much from everyone that they do not survey gardens for this purpose/small parcel of land and are more interested in surveying land that can be developed.

Therefore like people have said i think it is going to be a process of negotiation. 

I'd just like to say thank you for people's initial input so far and i will let you know the outcome.

It sounds like they are trying to make this your problem! Also the implication that if you ask much more than they've suggested that you're being greedy. That's how it reads to me anyway.

Unless you're desperate for some cash I'd be inclined to sit tight. Seems a lot of bother to get valuations etc., let them pay for a professional survey/valuation and then you can decide if it's worth it to you.

bouicca21

Several years ago a relative was in a similar position, except that he was the one wanting to buy a bit of garden.  The question of valuation was a tricky one.  The vendor insisted tha land should valued as having building potential (a local developer had bought some houses with big gardens and put a new street of houses in).  It was seriously unlikely that such a development would take place so the counter argument was that it was just a bit of garden with no intrinsic value above, say, a bit of field.

The reality was that it wasn’t really about value in pounds per sq metre, or about the value it would add to relative’s house. It was about the value of having the enjoyment of a nice garden.  The vendor got his price.