Why choose developers over estate agents when selling land?
Selling land doesn't have to be confusing or time-consuming, providing you take the right approach. Since it is a legal transaction, you want to involve experienced professionals throughout the sale.
In London, you can sell land to a developer or through an estate agent. Not sure what path to take? Here is why a property development company may be the better option.
1. Selling land to a developer is cost-effective
A property agent acts as a middleman, and you have to pay them commissions or premiums. As of 2021, the average agent fee in London stands at 1.74% (inclusive of VAT).
Though you can negotiate to get a reduced service, you could pay a fixed upfront fee, which is non-refundable even if your land doesn’t sell. Nevertheless, hiring an expensive agent doesn’t always mean a better process. From placing ads in the open market, multiple viewings, and waiting for offers, the process of selling through an agent can be exhausting.
On the other hand, if you decide to sell land directly to a developer, the process is quicker, and you’ll make a good profit. Property developers provide unmatched resources, expertise and connections. Plus, you don't have to worry about appraisal, inspections, or negotiating closing costs.
2. A developer will not keep you waiting in line
When the purchase of one property depends on the sale of another, it creates a phenomenon referred to as property chain. The good thing about developers is that they have ready cash.
As such, you don’t have to wait for them to sell a different piece of land to buy yours. They usually sell a fully-developed property later. A series of property chains is not only time-consuming but also an opportunity cost. With a developer, your closing time will not be affected by other property sales, lowering the risk of it falling through.
3. It's more straightforward to sell land to a property developer
Most people prefer to sell land to a developer to avoid misunderstandings with the buyers. Miscommunication is expected when a go-between is involved.
Moreover, the possibility of your land sale reaching completion will be very low if the potential buyer has numerous options at their disposal. An ordinary buyer can call off the deal even a few days before closing.
That’s why you need a reputable developer to eliminate such uncertainties. You will be aware of who you’re selling to since you are in direct contact.
Once a developer shows interest in your land and drafts a legal agreement, they cannot withdraw due to personal reasons. Again, most home builders have a part-exchange scheme. It’s in their best interest to have your land sale succeed so you can purchase one of their newly developed houses.
A solid agreement offers security and transparency in the unfolding of events. You can ask all the questions you may have, and you’re free to engage a financial advisor or lawyer.
4. No worries about endless viewings
It is inconvenient to have frequent visitations by strangers who want to know everything, including your reason for selling. It may feel intrusive and emotionally draining if you are selling land following unwelcome events like divorce, the death of a loved one or job loss.
A property development company eliminates the hassle of scheduling property viewings. This will save you time and stress.
5. You get to complete the sale at your own pace
One of the benefits of selling to a developer is the flexibility of the completion date. Developers are more willing to change the dates than estate agents.
Selling on a timeline that suits your needs is everything you would wish for if you want to sell land. You can discuss your plans with the developer, e.g., how long you wish to use the property before they take it.
6. You can fund a new house with equity release
Are you considering moving to a smaller home? If you want to sell part of your property, such as the garden to reduce the cost of a new house, working with a residential developer could be your best option. An extensive backyard is especially an attractive option for home builders.
Equity release allows you to buy another house, and you don’t need to relocate. You can move out later or figure out other ways to use both properties.
7. A slow market does not impact you
We are living in uncertain times where many people hesitate to make a land purchase. An economic crisis can reduce disposable income among potential buyers. Consequently, property sales may go down.
A slow market can have you waiting too long to get a qualified buyer. Luckily, a developer doesn’t face the same obstacles as individuals do. Many times, a company doesn’t need a mortgage.
A commercial developer views low-priced property as an opportunity. They will want to buy quickly and convert it into smaller, manageable plots of land.
Consult NFC Homes
Are you interested in selling your property or urgently need a land valuation? We’ll be glad to assist if you have any questions. Get in touch with us today for a free, confidential and non-obligatory consultation.