Developer wants to buy house, what premium is appropriate?
Discussion
Personally in this market I would just sell. A 25% mark up is pretty good whichever way you look at it.
What happens if everyone plays the same game and says no holding out for more so he just walks away??
As you said yourself the row of houses is not central to the development going ahead - what happens if he just builds round the row of terraces and misses that corner out? You would be left with a house that is worth less than it is currently and a massive complex behind your house.....
It's a calculated gamble and one where I would be happy to make a quick 25% for not doing anything and will allow hme to move "up" the ladder free of charge
What happens if everyone plays the same game and says no holding out for more so he just walks away??
As you said yourself the row of houses is not central to the development going ahead - what happens if he just builds round the row of terraces and misses that corner out? You would be left with a house that is worth less than it is currently and a massive complex behind your house.....
It's a calculated gamble and one where I would be happy to make a quick 25% for not doing anything and will allow hme to move "up" the ladder free of charge
Marf said:
Assuming the developer wants to buy all 6 houses, speak to the owners of the other 6 and get some collective bargaining going on.
In my experience the different owners will always stitch each other up. Here is an example on a site I bought a few years ago.4 owners, all needed for the development, price agreed with all 4.
2 of the 4 owners approached me directly, asking me to say nothing to the other two but demanding an extra £50k each
1 of the two the approached on his own asking for a further £30k on top of the £50k enhancement and again he asked that the others be told nothing.
The end result was less for each of the owners as I had a further 2 contracts to pay for and extra hassle, so i re-negotiated the base price to all 4. (Land value is a residual calculation based on income less costs and profit. In a competitive environment the profit is normally already at the company's lowest hurdle rate).
The underlying rule in ALL property transactions is: GREED IS THE DRIVING FORCE
I would suggest he should probably take it. 'A bird in the hand is worth two in the bush', on the basis that the developer puts in a contractual written offer.
Your brother has got lucky. He has NO idea what will happen in the future. Developer goes bust/finds another way into the site etc etc.
He may well get more in the future, but he may also lose out on the opportunity.
Your brother has got lucky. He has NO idea what will happen in the future. Developer goes bust/finds another way into the site etc etc.
He may well get more in the future, but he may also lose out on the opportunity.
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