As a homeowner, selling your property directly to a developer may be a daunting task. Here are the best steps a homeowner should take if they want to sell their property to a real estate developer:
1. Zoning
The current and future zoning is important to the home owner because it may affect how much the home is worth. "If a residential property is located in an area that is transitioning to commercial or mixed-use it could add to the value if the zoning is changed to commercial but in some cases it may detract from the value.”
2. Get an estimate of the market value of your home
Get an estimate of the market value of your home based on an appraisal by one or more real estate appraisers.
Before you sell your home to a developer, you have to understand what the value is as the house stands today. For that, it’s helpful to do a comparative marketing analysis. Ask three real estate agents (from three different firms) to come in and tell you the price at which they’d list your home.
If you are not able to hire a real estate professional to appraise your home, another way to get a rough estimate is to look online for houses that recently sold in your neighborhood (or comparable areas). Try to find as many as you can with similar amenities and age as your home. Examining the number of bedrooms, bathrooms, lot size, and other features are important when seeking out comparable properties.
Make sure to take closing costs and taxes into account when figuring out what you should sell for.
3. Inquire as to whether the developer is interested in buying neighboring properties.
If the developer is purchasing more than one property in your neighborhood, it may be in your best interest to get together with neighbors before negotiating with the developer. Talking to neighbors who received or are likely to receive an offer from this developer may help you get a better offer.
For Example: In Washington, a man sold his home with six other neighbors as a bundle to developers. In this process, he found out his home could be worth $739,000 if it was sold to a developer. But if he sold his home with six other neighbors as part of a larger bundle of parcels, he could make $875,000.
4. Read your contract carefully
Developer contracts can become complicated. If possible, hire an attorney to help you review and negotiate terms in the development contract. Watch out for terms and conditions that favor the developer.
Do you own a home in the Greater Boston area and thinking of selling directly to a developer? Contact us today! We'd love to hear about your property.