Selling house to development company

[newfangled]

If they won't meet your premium now then don't sell. If you think the property values are going to go up because of what they are building now and if you think what they are building now is going to be so successful that they are really going to want your property, then hold it and when they want it bad enough, they will pay your premium.

AGREE!!!! And if they don't want it then someone else will. The long contract length and rudeness tells me they are playing games. There is absolutely no justification for that.

They DO have the power to give you the value of the home plus some premium, your cost of relocation and closing on another home, and they don't need any longer than the time it takes to close to get it to you.

 

[Gigi22]

OP, if you are not interested in moving in the first place, in negotiating with a developer, you are really diving into the deep end of the pool. If you are interested in selling your house/land, do your research and hire professionals to work for you. On the other hand, you can always approach the developper's major competition and ask how much they would give you to tie up the land, KWIM?

 

[Miss Mary Poppins]

They are speculating. Great for them terrible for you. I would tell them to check back with you in a year or so and you can talk. I wouldn't even bother with a realtor unless you want to sell your home outright. I'm willing to bet other offers will be coming even if you say no now.

 

[ellochka]

Since you are not professional negotiators and they are, you are going to lose. If you decide to sell the house, you must find out what the market price is, and the only way to do it is to get price quotes from several buyers. The simple truth is that in one-on-one negotiation the other side has all the advantages.

So, my recommendation is to talk to a real estate agent about putting the house for sale. Put it on the market when you are ready to move, and see what you got from other buyers. I would even look for a real estate agent that works with commercial and development properties.

If you decide not to put the house up for sale, then the negotiation advice is to put your bid first and put it high. Essentially, that's what your counterpart has done already to you - they put their bid first, and they put it low. Now, it's the "anchoring price". So, you have to tell him flat out you are not interested, period. Cleanse the palate. Start new negotiation a few months from now, and start it with a stratospheric price. Come up with a list of reasons why you price it so high (zoning, size, they will never find a corner lot again, whatever) and just keep repeating it like a drone. Settle for a 20% discount.

 

[MomToOne]

In this situation, I would also consult a Real Estate attorney, to ensure that they way the company wants to do things really is the way they should be done. (What they are saying seems fishy to me quite frankly).

And that's coming from someone who doesn't believe in running to an attorney over every little thing (despite having them in the family ). I just think this is a big enough thing that it's warranted.

 

[Anthony1971]

The only thing I want to add is do NOT go by what Zillow says... in some areas it is fine in others it is way off.... it takes all houses that are sold in a X radius. A lot of areas have small pockets that have much higher values.. get a real appraisal and go way up from there... then tell them to make you an offer. come down a few thousand... and see if you can land at something that may persuade you to move... if that is what you want. But 500-1M across the street will put your house in on of the small pockets...

 

[GOOFY D]

If you think comparable houses are already going for nearly $85,000 more than you paid, why would you even consider $20,000 over your cost or even $70,000 over your cost? I would start very high and go from there. Also, I would want more than $1,000 every 6 months for them to hold an option on the property (which is all they are doing). It would have to be at least $1,000 or more a month for the option with a cancellation fee as well as a deadline (so that they cannot hold an option forever).

 

[okeydokey]

I would not agree to anything that pays in dribs and drabs over a long time while they decide if they want your house. I would either sell now and move and charge them a huge sum, or tell them you are not interested.

 

[OhMari]

I wouldn't move, your land is what they are after.
If you sit even 3 years, you will be making a lot more money.
Tell them you are not interested, you have a total investment in your house that people can only dream about. Why do you think they came to you.

 

[lovemylife]

OP here. Thank you all who took the time to write a response. My DH and I discussed it last night. He was working when they called, so I relayed it to him. We both decided that it is not in our best interest to sell it to them now, especially for what they are offering. If the developers come back to us with an offer, we are going to say that we have thought about it and if they really want it to come back to us in 2-3 years. It took them 4 years before building across the street from me, so they are very slow to move. Also, they are building condos and townhouses, apartments and a few custom homes. As of right now, they have one show house done and framing started on another. That is all. I don't even know if they have sold any of them. If they do finish developing the area, my property values will continue to go up and then my property will be worth more money. My DH only has 5 more years before he is fully vested in his pension for the highest amount he could get. Once he is done with that, we may consider selling and moving out of state. Then I wouldn't care if they bought it. I just don't want, like everyone else said, to have the property tied up for so long. There may be more competition for it later. Once again, thanks to all you took the time to help us out. If they do come back, I will let you know.

 

[AnAmericanInDisney]

If your original price wasn't okay, you wouldn't have gotten a second call. Stick to it. Tell them you can deal with their convoluted pay out scheme but your price is firm. They are trying to negotiate, and they sense weakness. Guy number 2 must be the negotiator. I suggest you get a lawyer to deal with him and just sit back.

 

[artemis4]

If your original price wasn't okay, you wouldn't have gotten a second call.

Not true. I'm in real estate, and I have helped people who had a property that a business wanted to acquire.

A business expansion was planned and this property was the last to be acquired. The home owners were ignoring my advice and were demanding a price that was highly premium with the assumption that the business needed the space. The business was offering a price that was a bit over market value. The business came back to the home owner multiple times, but they never came close to meeting the home owner's price demand. I heard through a contact that the business was beginning to internally rearrange the expansion plan rather than deal with the unrealistic price. I told the home owners, and they reached out to accept the business' last offer. If the home owner hadn't listened to me or if the internal planning for the business had gone too far, the home owner would have been stuck with a drastically reduced asset after the new expansion was complete.

That said, this company is asking for a really cheaply obtained option to buy. Definitely consult a real estate attorney for assistance if you change your minds and consider giving an option. I'm a realtor, but so few realtor specialize in options from the home owner's side of things that I would absolutely recommend an attorney in addition to consulting a realtor regarding fair market value.

 

[AnAmericanInDisney]

Not true. I'm in real estate, and I have helped people who had a property that a business wanted to acquire.

A business expansion was planned and this property was the last to be acquired. The home owners were ignoring my advice and were demanding a price that was highly premium with the assumption that the business needed the space. The business was offering a price that was a bit over market value. The business came back to the home owner multiple times, but they never came close to meeting the home owner's price demand. I heard through a contact that the business was beginning to internally rearrange the expansion plan rather than deal with the unrealistic price. I told the home owners, and they reached out to accept the business' last offer. If the home owner hadn't listened to me or if the internal planning for the business had gone too far, the home owner would have been stuck with a drastically reduced asset after the new expansion was complete.

That said, this company is asking for a really cheaply obtained option to buy. Definitely consult a real estate attorney for assistance if you change your minds and consider giving an option. I'm a realtor, but so few realtor specialize in options from the home owner's side of things that I would absolutely recommend an attorney in addition to consulting a realtor regarding fair market value.

But the OP isn't asking for a gold mine like in your example. She's happy where she is and could probably wait them out awhile.

 

[artemis4]

But the OP isn't asking for a gold mine like in your example. She's happy where she is and could probably wait them out awhile.

My remarks were in relation to two things.

1. Your comment that if her first price was out of line, the developer wouldn't have called back. Not always true. In my scenario, the business had no intention of paying the homeowner price, but still kept calling for six months. (FWIW, my clients weren't asking for a gold mine, rather 1.5x market value because they felt they should recoup costs for inconvenience and the idea that the business needed the property so they would pay up. That was the wrong through process in that situation.)

2. I'm seeing a lot of "my relative got 3-4 time market value" "you're sitting in a gold mine" "stay firm" sentiment in this thread. Sometimes, that is the right advice. Other times, it's very poor advice. Only someone who intimately knows the OP market, location, development prospects, and other details of the transaction can truly advise OP on specifics. Options to purchase can be beneficial to either the person giving the option or the person purchasing the option or they can do right by both. The devil is always in the details.

 

[01spirit750]

I have read most of the replies.

If this was me, here is what I would be telling myself:

1. I need to negotiate the price based on the value to the developer. I should not consider the value to me. Of course the developer is trying to convince me based on my purchase price. THis puts me at the disadvantage and I will lose.

2. I should consider the profit that the developer will generate from my property for years to come.

3. I should not enter into any contract that only prevents me from selling to anyone but the developer.

4. I need to remember, who approached who?

5. I do not have to be resonable, I was not interested in selling. Time is on my side. Maybe there is another developer who would be interested?

6. Disneyland just paid $99.9 million for 50 acreas of strawberries. The previous owners paid $10k in 1950. Disney had been trying to buy this property for the past decade.