Letter re land purchase request (1 Viewer)

[Van Aert]

We live in a bungalow in a small cul de sac a short walk from a town centre (Home Counties, not far north of London). Three of the four bungalows in the road are in our family, it is only the four bungalows that are the subject of the land purchase request. Over the last 20 years or so we have had approximately a dozen letters from different house builders asking if we are interested in selling to them, we never replied to any of them and no offers were ever put forward. This week we got another letter (from a well known national retirement flat builder) asking if we are interested in selling our freehold interests for a ‘well above market value’ figure. We are all now in the position where we are interested in seeing what sort of offer we would get and whether it would make sense to sell or not. What would your next plan of action be? Would you bother contacting the previous enquiries or just see what the most recent enquiry comes to and , if we are happy, go with that? Any pitfalls we should watch out for? Any advice appreciated. Thanks

 

[chaser]

We live in a bungalow in a small cul de sac a short walk from a town centre (Home Counties, not far north of London). Three of the four bungalows in the road are in our family, it is only the four bungalows that are the subject of the land purchase request. Over the last 20 years or so we have had approximately a dozen letters from different house builders asking if we are interested in selling to them, we never replied to any of them and no offers were ever put forward. This week we got another letter (from a well known national retirement flat builder) asking if we are interested in selling our freehold interests for a ‘well above market value’ figure. We are all now in the position where we are interested in seeing what sort of offer we would get and whether it would make sense to sell or not. What would your next plan of action be? Would you bother contacting the previous enquiries or just see what the most recent enquiry comes to and , if we are happy, go with that? Any pitfalls we should watch out for? Any advice appreciated. Thanks

I would contact a local estate agent and get a valuation of what you could be talking about on the open market, and if you are really interested in selling let the buyers fight it out between them.

 

[joe and sue]

I would speak to some reputable valuers / estate agents, and get their opinions on the value, and start bargaining !!

 

[Podney]

Do you know what the owners of the fourth bungalow are likely to want? It would be good to have them ”onside” . If they don’t sell the whole deal may be off? Certainly contact local valuers and maybe a couple of other developers.

 

[Van Aert]

Do you know what the owners of the fourth bungalow are likely to want? It would be good to have them ”onside” . If they don’t sell the whole deal may be off? Certainly contact local valuers and maybe a couple of other developers.

Sorry, I should have clarified that, yes they are keen to sell also. We are also clear on what our individual market values are for each property. Thanks

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[Figaro]

It's going to need all four freeholders to agree to a sale, so I'd be inclined to sound them all out first.
If one declines the deals off.
Agree, and let the interested parties fight it out.
Edit : answered above

 

[Abacist]

I think this needs some care. I would contemplate a binding agreement between all 4 households drawn up by a firm of solicitors who would act to deal with the legal aspects of the sale. This would bind the parties together, deal with the sharing of costs and proceeds etc and what happens if someone withdraws, penalties etc. They would advise on a suitable agent and method of disposal etc.
Any casual approach to an agent is likely to lead to a demand for a commission on the sale which is why you need a legal agreement so all agree on who to approach etc.
To get the best price this needs wide marketing and probably an auction with an agreed reserve for the whole might be best.

 

[chaser]

Quite a few things come up here, have all four of you had the same letter or just you, are they offering to buy your separate houses individually or as a whole, does it hinge on selling them all, do they know that three of you are family members, if so how do they know, will they all be knocked down,if so you are just looking at building site price, which may be different than selling separately, I would say there must be more to this than meets the eye.
Why is this site so desirable that more than one buyer seems to have done some homework on it?

 

[Jim]

If I was the fourth, knowing how much you three want to sell, I'd sound a little reluctant and maybe require a little inducement from each of you three. Hope your neighbour's not reading this

 

[Van Aert]

I think this needs some care. I would contemplate a binding agreement between all 4 households drawn up by a firm of solicitors who would act to deal with the legal aspects of the sale. This would bind the parties together, deal with the sharing of costs and proceeds etc and what happens if someone withdraws, penalties etc. They would advise on a suitable agent and method of disposal etc.
Any casual approach to an agent is likely to lead to a demand for a commission on the sale which is why you need a legal agreement so all agree on who to approach etc.
To get the best price this needs wide marketing and probably an auction with an agreed reserve for the whole might be best.

This makes a lot of sense, thank you.

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[Van Aert]

Quite a few things come up here, have all four of you had the same letter or just you, are they offering to buy your separate houses individually or as a whole, does it hinge on selling them all, do they know that three of you are family members, if so how do they know, will they all be knocked down,if so you are just looking at building site price, which may be different than selling separately, I would say there must be more to this than meets the eye.
Why is this site so desirable that more than one buyer seems to have done some homework on it?

Yes we have all had the same letter, they are only interested in all four properties as part of what they call a ‘land assembly’. All letters are addressed to us individually by name (I guess they get this info from the Land Registry). There are several flat developments around us and our gardens are fairly large - without doubt they would be knocked down and replaced with another flat development.

 

[Abacist]

Quite a few things come up here, have all four of you had the same letter or just you, are they offering to buy your separate houses individually or as a whole, does it hinge on selling them all, do they know that three of you are family members, if so how do they know, will they all be knocked down,if so you are just looking at building site price, which may be different than selling separately, I would say there must be more to this than meets the eye.
Why is this site so desirable that more than one buyer seems to have done some homework on it?

If it’s a cul de sac it might provide access to more land which might enable it to be developed as well thus the 4 bungs might not be the whole story.

 

[Van Aert]

If it’s a cul de sac it might provide access to more land which might enable it to be developed as well thus the 4 bungs might not be the whole story.

There isn’t a lot spare around us but it’s possible I guess.

 

[Jo662]

Quite a few things come up here, have all four of you had the same letter or just you, are they offering to buy your separate houses individually or as a whole, does it hinge on selling them all, do they know that three of you are family members, if so how do they know, will they all be knocked down,if so you are just looking at building site price, which may be different than selling separately, I would say there must be more to this than meets the eye.
Why is this site so desirable that more than one buyer seems to have done some homework on it?

I would think that the land these four properties are on would, when knocked down,enable far more properties to be built. Older properties footprints are so much larger than ones built nowadays.

 

[Pausim]

I would take professional advice. Has the developer already got outline planning permission? If not he will probably make his formal offer subject to obtaining planning. Does the developer own any adjacent land? Does the land form a possible access to a field or other undeveloped land. Has the land been zoned for future development in the Local Plan? You might be able to increase the site value yourselves by getting outline planning consent and then marketing all 4 bungalows as a development site. Perhaps speak to your local planning authority to find out if they know what is going on.

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[Van Aert]

I would think that the land these four properties are on would, when knocked down,enable far more properties to be built. Older properties footprints are so much larger than ones built nowadays.

My personal view is that the total site has the potential (and would likely get planning) for a 3 storey development of around 50 flats. Not guaranteed but based on what is around us.

 

[Van Aert]

I would take professional advice. Has the developer already got outline planning permission? If not he will probably make his formal offer subject to obtaining planning. Does the developer own any adjacent land? Does the land form a possible access to a field or other undeveloped land. Has the land been zoned for future development in the Local Plan? You might be able to increase the site value yourselves by getting outline planning consent and then marketing all 4 bungalows as a development site. Perhaps speak to your local planning authority to find out if they know what is going on.

Some good points there. I would expect that should we go back to them expressing an interest they would then only come back with an offer once their plans were approved or that it would be an offer subject to planning approval. I’m pretty sure the land hasn’t been zoned for future development in any local plan. Thanks

 

[Pausim]

Some good points there. I would expect that should we go back to them expressing an interest they would then only come back with an offer once their plans were approved or that it would be an offer subject to planning approval. I’m pretty sure the land hasn’t been zoned for future development in any local plan. Thanks

I think the developer may start with getting at least one of you to sign an option to sell their land, subject to planning. Once he has picked off one owner with an option he basically has control of any future development. You very much need to work together on this. The site with outline permission is probably worth a great deal more than its present hope value. Take great care with every step you take. If it were me I would be looking for a planning consultant for a bit of advice.

 

[Van Aert]

If I was the fourth, knowing how much you three want to sell, I'd sound a little reluctant and maybe require a little inducement from each of you three. Hope your neighbour's not reading this

They are actually the keenest to sell!

 

[dna]

Can you search your local authority planning applications to see if any outline applications have been submitted.
The council’s development plans should asking be online so you can see their ideas for the areas around you.
You could also ask for an informal meeting with the planners to ask about your situation (although that would mean the council knowing of your ideas)

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[Van Aert]

I think the developer may start with getting at least one of you to sign an option to sell their land, subject to planning. Once he has picked off one owner with an option he basically has control of any future development. You very much need to work together on this. The site with outline permission is probably worth a great deal more than its present hope value. Take great care with every step you take. If it were me I would be looking for a planning consultant for a bit of advice.

That makes sense, we have very good communication between us and all get on very well (at least we do at the moment!). Thanks

 

[Van Aert]

Can you search your local authority planning applications to see if any outline applications have been submitted.
The council’s development plans should asking be online so you can see their ideas for the areas around you.
You could also ask for an informal meeting with the planners to ask about your situation (although that would mean the council knowing of your ideas)

I will look into that, thanks.

 

[Coastal Cruiser.]

One thing is for sure the developer is not your friend and will try to shaft you as much as they can

Best get same solicitor to act for all owners and to read the very small print they put in the option should they offer, normally the option will say they will pay once planning has been approved but then they hold back obtaining one little bit of planning for a minor thing so they do not have to pay until they are ready and in the case of my old neighbour who sold his 15 acres for 154 houses that was about another 2 years!!

Good luck.

 

[Wildbill]

Think about how much it would cost to get a new property or build a new one no point in ending up with a mortgage.
And could you all live in the same aria again
Bill

 

[Peppadog]

Keep it simple. All you need to do at the moment is tell the prospective purchaser you might be interested. Then meet them together and listen to what they are offering. Why? Because you already know the current value of the individual properties, and you are all prepared to sell at the right price.

You make them pay for your chosen solicitors etc and all costs on top of the offer price. All rest suggested seems pointless to me as you just say no if its not enough, and it costs you nothing.

The developers will be aware of other interest. If not, tell them when you meet. Its up to them if they make you a good enough offer not to start a bidding war.

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[Brains]

Developers work on the 'Divide and Rule' principal.

All the above advice is good.

You have to work together, you will need to put the 4 sites on the open market as a single entity.
Let the Developers compete amongst each other.
If you could get outline planning permission it would be worth a whole lot more.

Be aware the timeframe on this sort of move is measured in years not months!

You will need a copper bottomed legal agreement between you all, to ensure no one pulls out and that you all get a fare share.

It will need a proviso for what happens when the developer goes bust (a very regular problem).
At what point does the property or land revert back to you ?

You could also look at selling the land with a lease on it, builders do it to their home owners, so you could do the same back.
It will give you something else to sell in the next few decades.

I would also add a proviso that you can remain in the property after the sale until the bulldozers move in, which could be another 2-4 years, for free (or a peppercorn rent).
It may suit both parties to do this, as no one wants a empty building site or a load of boarded up potential squats sitting around for years

Back in the 90's a road full of local families near us sold their houses for redevelopment, due to the downturn they carried on living in the houses for another 8 years, for free!
With the money in the bank either paying a lot of interest at the time, or they had bought other houses which they then rented out for 8 years and paid off their mortgages.

The only issue was 10-12 years of uncertainty of exactly when they would be moving out and by the end, all the once very nice houses looked very shabby as they had had minimal maintenance for years.

 

[Kannon Fodda]

The value of the existing four properties, as the assembled site is clearly developable, is not as the current bungalows but as the site. So this all depends on what the site will become. Stop basing the value on an uplift of the existing bungalows but work back from the value of the completed development in simple terms value of the new build, less the costs of developing (build, finance, architect, sale, solicitors, demolish existing, site survey and investigations, etc) and of course profit gives the current land value. That needs someone to be able to accurately predict what the site will take. You may wish to engage a professional development valuer but that means an outlay to you.

Frequently these sales will take time. The land purchase often is done as an option agreement, for which there is a small initial payment or deposit to create the exclusivity to the purchaser whilst they assemble the site and obtain planning. Getting planning is time consuming. Actual sale completes only after planning obtained. There can be arrangements for "overage" if they get greater planning than was expected.

Do check for restrictive covenants that might prevent development taking place. Also you can look at covenants to prevent the lans being used as access to another future site.

 

[Langtoftlad]

Do you want to move?

 

[TOAD on Tour]

If it was me and you are confident that all 4 will be interested, I’d liaise with them and not reply back to the developers. Jointly go and see a solicitor and get them to act on your behalf from day 1. That way the developer knows you are all serious, but also knows they can’t bully you or try and pull the wool over your eyes. All the advice on here can help you think about your situation etc. but is completely worthless if it all goes belly up because of something you’ve agreed to or signed without legal advice that’s acting in your best interests. Just my tuppence worth! Best of luck and sounds exciting times. Finally knowing that the developer is going to make a fortune potentially, I’d want it to be very worthwhile to me before I agreed to sell.

 

[buttons]

Not sure what the problem is, all four owned by your family members, all willing to sell. the price offered is above market value. Get organised find somewhere to live get yourselves a planned moving date then go back to the offer who could complete with short notice and negociate the price on four units on for given date. They are the developers not you

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