Another Land Question
Discussion
Just spoken to the owner of a piece of land near me which currently has a stone barn & a temporary building on it.
The site measures approx. 30m x 30m and he is quite up for selling it (with the possibility of another 15m x 15m piece of land attached to one side).
It has its own access, etc, & is prime for building residential on.
Now, we didn't discuss figures as at present I have no idea on what would be acceptable to the council, ie apartments/houses, etc.
My question is, is there a way I can tie up that he cannot sell the land to others & yet not make a 'definitive' offer ? I don't think he will sell it as just normal land as he knows the potential, however, the potential is unknown.
What would be the best way forward ?
Would a clawback clause suit both the best, ie agree a 'cheapish' figure for the land as it stands, however, then state that I would agree to give him x% of the revised worth upon reciept of any planning approvals.
Alternatively, is it normal practice to have some kind of lock-out agreement whereby I have first refusal for a stated period of time, yet without ever having mentioned figures.
Basically, how do I make sure he doesn't talk to others whilst I look into what I could get on the land ?
The site measures approx. 30m x 30m and he is quite up for selling it (with the possibility of another 15m x 15m piece of land attached to one side).
It has its own access, etc, & is prime for building residential on.
Now, we didn't discuss figures as at present I have no idea on what would be acceptable to the council, ie apartments/houses, etc.
My question is, is there a way I can tie up that he cannot sell the land to others & yet not make a 'definitive' offer ? I don't think he will sell it as just normal land as he knows the potential, however, the potential is unknown.
What would be the best way forward ?
Would a clawback clause suit both the best, ie agree a 'cheapish' figure for the land as it stands, however, then state that I would agree to give him x% of the revised worth upon reciept of any planning approvals.
Alternatively, is it normal practice to have some kind of lock-out agreement whereby I have first refusal for a stated period of time, yet without ever having mentioned figures.
Basically, how do I make sure he doesn't talk to others whilst I look into what I could get on the land ?
Edited by Hobo on Tuesday 19th June 14:18
Hobo said:
Thats all very well but how do you know the other offer is genuine ?
I'm more tempted to say we'll pay whats its worth now, ie without any planning, and on obtaining planning we will pay him x% of the increase in the land worth.
You won't know if the other offer is genuine - and if it's not, and you won't pay what he is asking then it won't sell so call his bluff.I'm more tempted to say we'll pay whats its worth now, ie without any planning, and on obtaining planning we will pay him x% of the increase in the land worth.
The second option is perfectly feasible if the vendor will go for it.
Personally, I'd talk figures with him first - if he offers it for a price you consider to be cheap then you don't want to talk him into a deal where you are going to pay him x% extra!
Hobo said:
UpTheIron said:
Personally, I'd talk figures with him first - if he offers it for a price you consider to be cheap then you don't want to talk him into a deal where you are going to pay him x% extra!
Just considering my options should he say a figures which is ridiculous.
There are two options. How much do you like risk?
If you buy it from him from the current value, the price will of course be lower, but you take the risk you have invested money in something you cant get back against making a packet if planning goes ahead.
The other way is to split the risk in the way you have explained.
What it comes down to is what HE wants to do as in a way he holds the cards. If he had the inking and application (no pun intended) then he would have got planning for himself and sold the land. He doesnt, and may just want a little chunk of money for his retirement fund.
I would be tempted to take a punt should the price be right - and if its not right not get too involved you can't walk away in a second.
Option him up with an override so he gets a cut on the action over the strike.
For a rough value, look at what other properties are in the area, take the average, how many will fit? Find value. Land = 1/3
Very, very crude.
If you are serious you need to bring in a pro to draw up the deal withis chap and take a slice from there.
Try and do it yourself and you stand a good chance of a pro getting wind (ie the vendor will approach to check your vals) and you'll get cut out for nothing.
For a rough value, look at what other properties are in the area, take the average, how many will fit? Find value. Land = 1/3
Very, very crude.
If you are serious you need to bring in a pro to draw up the deal withis chap and take a slice from there.
Try and do it yourself and you stand a good chance of a pro getting wind (ie the vendor will approach to check your vals) and you'll get cut out for nothing.
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