Imagine that the rumours that have been circulating for months have finally been proven to have substance — a property developer has begun negotiating to buy properties in your block, but what do property developers look for?
If you can sufficiently overcome your emotional attachment to your home to endure it being razed and replaced by a different style of residence, then you may benefit financially from selling your house to a developer.
Here’s what you need to know if such an opportunity arises and you are interested in taking advantage of it.
What do property developers look for?
The size of your block of land is one of the major factors determining whether or not a property developer would be interested in buying your house.
Part and parcel with that is the number of dwellings the developer will be permitted to erect on the block under council zoning rules.
While a developer will pay only wholesale prices for land, sometimes the number of potential dwellings on the property will cause the wholesale price of your land to be higher than the retail price of your existing house.
In our western and coastal suburbs of Adelaide, we also know developers look for
- What is happening in the neighbourhood (surrounding suburbs)
- Proximity to amenities (transport, shops, school zones)
- Proximity to the city and/or the sea
Collective selling power
In most cases, a single property owner has little clout when in negotiation with a property developer.
In a recent trend, collectives of owners (between 4 and 40) of neighbouring properties in Sydney and Melbourne have successfully negotiated with developers to receive 15–25% and more in excess of what owners would have been paid individually.
Enlisting members, organising a collective, achieving consensus and negotiating a successful outcome are not for the faint-hearted, with one collective initiator likening it to ‘herding cats’ (Financial Review).
Seek advice from a property expert
To find out everything you need to know and receive informed advice, talk to your experienced local real estate agent.
The team at McGrath Real Estate has expertise in working with property developers and in acting on behalf of those seeking to sell to them.
We can help you understand the process, the likely timeframes involved and the potential pitfalls for the uninitiated.
We can also explain the possible impact on your lifestyle if you don’t sell to the developer but your neighbours do.
Proposals vs. actualities
It’s easy to get caught up in the excitement (or anxiety) of a rumoured property development in your neighbourhood.
Bear in mind that some property developers make fishing trips to get a feel for the prices owners may accept before they’ve even gained council approval for rezoning of the proposed development area—approval that can take years to obtain.
Although this is part of the developer’s research and planning, it can lead to owners’ expectations being raised unnecessarily and to consequent disappointment.
Is riding the development wave for you?
A trusted name in Adelaide’s western and coastal suburbs for 45 years, McGrath Real Estate knows this local area intimately and can help you answer, what do property developers look for.
If there is a development planned or even mooted for your neighbourhood, we’ll know about it and be in a position to answer your questions and give you informed advice about your options for selling or staying.