Are You Considering Selling Your Property to a Developer? Here’s What You Need to Know
If you have been approached by a property developer to sell your home, should you consider the offer? Is there anything in particular to be aware of when you sell to a property developer?
When a property developer approaches you to buy your home, it’s a good idea to take some time to consider their offer. Whether you are for or against suburban development, the fact that you have been approached means that changes are coming that are out of your control. So, here’s what you need to know if you are considering selling your property to a developer.
If you’re interested in selling your property to a developer
The first step is to get as much information as you possibly can about the developer’s offer to buy your property and their proposed project. If you’re well informed, you will be more easily able to work out whether their offer is reasonable, or whether you should ask for a higher sales figure. You can:
- Ask for a copy of their plans;
- Find out what prices they will be selling their units/houses for;
- How much they’re offering per dwelling;
- Ask if it’s subject to a Development Application, or a straight sale with no conditions;
- Find out if the developer has done any other projects in the area and if they have a good track record; or
- Ask for an in-depth explanation of the terms of their offer, specifically how long they plan to hold the balance of their payment.
While the initial offer might sound too good to be true, you need to be completely aware of their terms of the settlement. Depending on how cleverly they write their contracts, they could hold you to your agreement for years without paying you the balance, tying up your property so you can’t sell to someone else. And who knows what the market might do during that time. If you don’t consult with a property conveyancer to get a third-party explanation of their offer, you could end up being paid less than the market value in years to come.
Always seek a second opinion when consulting with property developers – that way, you’ll know for sure whether their offer is reasonable.
If you don’t want to sell your property to a developer
If you are adamant that you don’t want to sell, be perfectly clear with the developer. Otherwise, they may keep coming back to you with other offers.
The developer might be proposing to amalgamate a site, in which case it’s always a good idea to speak with your neighbours to find out if they are planning on accepting or refusing the developer’s offer. Development is easier to resist if you do it as a team.
On the other hand, if your neighbours want to sell, there will be a lot of pressure on you, both from the developer and from neighbours thinking of their profit, so be prepared for a battle.
Although you may not want to sell, think carefully about this decision. If the neighbourhood is undergoing development, it will be a very different place in three- or four-years’ time. Likely, your home will be surrounded by modern apartment buildings and shopping precincts, and all your neighbours will be gone. Your property may lose value by saying no now, putting you at a disadvantage if and when you want to sell in the years to come.
If you are sure you don’t want to sell and feel under pressure from a developer, you might hire a property solicitor or conveyancer to deal with them on your behalf. They will be able to keep them at arm’s length to relieve you of the stress and can easily assess any contracts presented to you.
For more information about Jim’s Property Conveyancing in Melbourne, for information about Jim’s Property Conveyancing Brisbane. Or for expert advice on property conveyancing services in Australia, please contact our friendly and experienced staff on 13 15 46.