Hi I'm looking for advise on the above – have never had this offerd to me as an option where we sell our vacant block to a property developer on delayed selltlement terms . They build on the block and handle all applications to shire and fund the building and construction of home,then once sold we selttle on the land .
all input is greatly appreciated
Regards,
KenHi Ken
This is where a developer wants to reduce the risk and cost of the development by placing that risk and cost on you. For example by not settling on the property they are saving interest cost on any funds required to buy the land. In addition you are occurring costs due to holding the site for some time (e.g. interest forgone and rates).
Developers often take an option on the land by paying a percentage fee up front that is not refundable if the development does not go ahead. This way you are paid for the time the property is off the market.
If you want to be hard nosed about it you can ask for the full price and a percentage of the uplift he will make in the profit on settlement. You can do this by way of a contract.
Regards
Steve
Hi Steve ,
appreciate your comments and advice – you have explained it very well – we had investment rental properties in the past but this was a ' new one ' for us on our vacant block .
We may consider the option, on examination of their 'Offer to Purchase' and the terms & conditions of that offer before we turn down the opportunity to sell to them , as we are not in any hurry to sell the block and the development venture may just be right for us .
Cheers ,
Ken
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