Anyone have experience with selling to developers?(6 Posts)
My father wants to sell his house but his garden is very long, and has potential for development. His three neighbours are all willing to sell half their own gardens too. In fact he was approached 3 years ago by a developer who wanted his garden and house for access to a development. He didn't want to move at the time so turned them down, and the development didnt go ahead. however, he now wants to move.
We have had three agents value the house, and one agent who came to value the house has offered to put us in touch with a property consultant who can draw up plans and get planning permission before approaching developers. He says the consultant will take his fee from the developers not ourselves.
My question is, do I need to go through the estate agent or should I be approaching planning consultants myself to avoid the estate agents' fees. Obviously, I will need to find someone I can trust so going through the agent would be less risky but I would be then stung for commission when the sale goes through. If I do a deal direct with a consultant, will it be less easy to negotiate no fees (as the agent has proposed).
The other option is to go direct to developers including the one who approached three years ago, and miss out the consultant/agent altogether?
I will soon be in an almost identical situation OP, but have no idea how to procedd, so hoping someone comes along with an some answers for you.
Selling with the benefit of planning permission will enhance the value but does require some upfront expenditure. I would be wary of someone promising free work. It suggests to me they are in bed with the developer they have in mind. If you sell straight to the Developer then they will probably offer lower as they have no guarantee that their application will be approved. That said I think the best idea is the three householders get together to do a debelopment scheme and then market the three houses together as the marriage value of the three houses will be more than each house on its own I presume? Then there can be a mini "estate" or cul de sac?
The current planning regulation requiring any development of more than 4 houses to give 30% over as affordable housing means that small developers are really only interested in plots that yield 4 houses. Look at what has been given permission for locally recently giving a planning precedent.
These things can take quite a long while over a year from starting process to having permission so this may not be a quick option.
If you enter into an option agreement be aware that it often runs to the developers timescale not yours.
Agree PP will add value to the house, with the most added value for a larger scale development and the more you can do yourself, the bigger the gains.
For you to get PP, you'll need to pay for an architect say £10k and planning fees, £300ish and a community charge. Do you know what housing mix the site suits, the local housing market? Build costs, sale costs? All of this would need to be agreed between all of you, arranging payment between the 4 of you could be problematic and you're probably looking at a hectic 12 months to get PP. And after all of this then you still have to sell the site.
I'd have a quick chat with the council planners, is it even a feasible development? If they say it is, then I'd go back to the original developer and see what he is offering you all. You may be able to negotiate not only a market price for your home, but a share of the profits as he sells each new house. Or perhaps if your father is downsizing and there is spare cash you could joint venture the build?
However tempting it is to try and go it alone, unless you've got a lot of time, I think it would probably be too stressful and time consuming - our PP for own home certainly has been! I know this sounds really negative, but sometimes its better to take the money on offer and run...
If you do sell straight to the Developer the way to profit share is called an "overage provision" so you get a percentage of the profits over £x thousand for example.
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