Hi
I have a very valuable large development property. My block is on a corner next to another and one the other side of it also on a corner. These are in a prime re-development site of 3 storeys (apartments/townhouses) in Canberra. A prime developer now owns the two next to me. The planning laws are such that all 3 blocks have to be developed together however development can take place on 2 adjoining blocks if the 3rd block owner consents. This could be for example, developing plans for the 3 blocks allowing me to develop my own block myself. Alternatively the developer could buy the property from me. However he is a meanie (as we possibly all are in property deals) having bought the block next door from the family of the deceased owner privately, without advertising, for a lower than market price. He has since offered me a below market price also and I’ve said get lost and comeback to me via mail to gpo address with an offer I cannot refuse. I’m not in a hurry to sell (not totally true) although of course if the price is right I will sell. He has not taken any action and I think he might, in the meantime, be going to rent the second one he now owns. On the one hand I feel I have a “Mayfair” property and yet on the other I’m wondering whether other developers out there would compete against the developer at auction and hence be left with only one person bidding ie the developer next door. I feel I should not approach him as I might be showing weakness on my earlier stand in front of him to stay here for many years. So do I go to auction say in 6 months time, just wait it out for him to approach me or just keep living here until he strikes as a vulture on my family when I go (not for 30+years).
Thanks Carpe
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Blink [blink]Well you cannot stop unethical people doing unethical things. You can chose whether you do business with them. In your situation whether you do or dont you may find the developer gets what he wants. I would guess your land is worth more when combined as 3x rather than on its own??
So I would think I would meet with the developer. Its not a sign that you are weak. Its a sign that you have a good business head. You know the numbers and are willing to negotiate. Even this developer will see a win-win if one can be had. You walk away otherwise and at least the developer understands your position and you understand his. It has to be a discussion with justification for each negotiation point.
And so long as you act ethically, I think you will feel ok about the whole thing.
Well thats my 2c.
Mat
Mathew
http://www.arrttt.com
Custom Oil PortraitsHi Carpe,
I would suggest you be upfront with the guy. Meet with him in person and tell him you are willing to sell, but only for a decent price. You could also offer to JV him in devloping the 3 sites together.
If he is unreasonable then just wait him out. If he is a professional developer he needs to turn his projects over, he won’t sit on the blocks forever.
Regards
AlistairThis is not advice just a similar alternative to those suggested. You could set yourself a reasonable price and then your minimum, appoach him with your offer of course the higher amount first. The reason I suggest to have your lower amount identified is so that he does not bartter you down beyond what is reasonable.
If he does not take it then you have the option to put it to market, remember though then there maybe extra expenses incurred for the sale
Wayne Skewes
Mortgage Broker
Email [email protected]
http://www.eaussie.com.au/Mortgages/Aussie_Mortgage_Adviser.asp?ContentID=852280
Refinace, Loan Consolidation, Owner Occupied or Investment Finance. Free Service I come to you!Thanks for responding Wanelad, APerry and Mathewc 73.
He is a professional developer but as I’ve discovered today he has actually rented out this new addition. He bought the first property about 4 years ago and has been renting it also. There is nothing he can do with the two properties unless he has my consent hence it has increased significantly the value, on paper, of my property. There is the risk that if I go to him it shows that I want to sell and he may then say ‘no I just want to keep renting the two properties!’ He will know then that he might just have to wait a few years before I capitulate at the price he wants. I’m not sure if other developers will buy my property if he gives the same answer to them (like his two properties I cannot develop mine without his consent). Hence instead of my property being a ‘Mayfair’ as it should be it could end up with the value of “Kent Rd”!!!
I’m thinking of writing to him and saying I’m in no hurry to sell particularly as I do own other high value development properties nearby (as I do). However notwithstanding this I realise that it will be beneficial to both of us to redevelop ASAP so let’s negotiate however I’m not interested in being offered a below market price. This will certainly be showing my cards and seems to me a bit risky. Alternatively, I could just wait a year or two and let him make the first move. What do you reckon?
Thanks Guys CarpeHi Carpe,
If you don’t open dialogue you’ll never get anywhere. Howe much info you give him is up to you, but I can’t see how you would be disadvantaged by meeting with him and opening discussions.
Regards
AlistairThanks APerry ….I have already given him a high ‘price’ but he has not made contact again to negotiate so I do think the ball is in his court. I’ll ponder your view however and make a decision in the new year.
Cheers
CarpeOriginally posted by carpe_diem:He has since offered me a below market price also and I’ve said get lost and comeback to me via mail to gpo address with an offer I cannot refuse.
You told him to get lost and stonewalled the negotiations in doing so. Now you need to re-pen the dialogue and come to the table without putting your cap in hand. (or at least this is my take on your point of view?) Going to him cap in hand and showing face can be the biggest negotiatins winner you have. BUT you must do it correctly. I note with interest however you call him a vulture as he purchased a deceased estate before it was advertised. is it the case you wanted to purchase it as well but he beat you to it? sit down with him and discuss the sale of your property. have it valued by 5 real estate agents and pick the median value as your base. At least then you have something to show him and a basis for your price. After all as property owners we all want our to be the Mayfairs of the world don’t we? And it does hurt to discover sometimes we have got a Kent instead…
Failing that keep your property or sell it to someone else….
Stuart Milne
Thanks Stuart. In fact I wasn’t interested in purchasing but tried hard with the daughter to get her to list it with a Real Estate agent rather than dealing directly with the developer. However she caved in worrying about the cost of using an agent and perhaps no one else interested…..it being the middle block or meat in the sandwitch. She was going to agree with a lesser offer (given she was from Qld and the proceeds of the sale anyway was to be split among 6 family members). So she did at least persist on a higher price at my insistence but it was still below the market price. He has bought both properties at below market prices and this is what he wants to do with mine. Luckily I am in a position to wait for many years and although I’d like to move on from this site there is no way I will capitulate so I’ll go on your last point and this is to not sell. Notwithstanding this I like your idea of calling in a number of real estate agents for valuations …so I will do that. Thanks Mate
CarpeWell surprise, surprise I got a registered letter from the developer today expressing that he wants to buy and make me an offer if I’m seriously interested. I expect this will lead to a sale. Thanks for all your comments…..I just love this site especially the generous contributions being made.
The sale of this property shows up the importance of location, location, location for real estate as the return on the purchase price will be 14 times the price we paid in 1986 (to be sure we may have been lucky…..it’s hard to imagine any price paid today for property can go up that much in 20 years from now).
Still I do think it’s possible if you stretch yourself in buying a land based property in the right location and you’re willing to suffer in the short term with a low rental yield relative to a high level of borrowing on the property. Anyway, whatever you do I wish you all the best with your investments.
Regards
CarpeCarpe,
Everything I own, is for sale.
Provided the price is right !!
This comment has stood me in good stead for years.
Tell him, before he makes an offer, if his offer is below your price, you’ll develop the property yourself.
This will put you in control. let him know that you’re easy to any situation.bruham.
Thanks Bruham. Like the developer who cannot develop his two blocks without my consent I cannot develop my block without his consent. He may approach me in terms of putting together plans for approval of all 3 blocks (my block with plans to suit me) and I could then develop my block separately. He has more to lose of course in waiting around for possibly years for my consent. So I expect that now that I’ve responded to him in writing along the lines that ‘ as I have no reasons for selling however I would consider an offer respective to the price I already expressed to you” that I will get an offer close to the mark…….alternatively I might get fitted with concrete boots and a ride out on the lake!
Regards
CarpeG’day carpe_diem,
As Donald Trump says, “no hard feelings, it’s just business.”
Same goes for you. You don’t have to love the bloke to do “business”.
Seeing you are each locked in to the same situation, you’ll both have to deal with it.
The situation might turn out to have a pleasant ending.bruham.
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