Land Assemblies-- not always for everyone!

by Geraldine Santiago 

There are many reasons why a homeowner may not want to sell to a developer.  Land assemblies are difficult and challenging because not all homeowners want to sell at the same time others are wanting to sell. 

Though the money is like a windfall and many people look forward to the 'next chapter', in their lives, there are others who find the entire process of change, selling, moving very, very stressful. For example, I know homeowners who are seniors who want to stay for as long as possible or who are unwell and cannot move out. No amount of money will make them move or sell. There are also some homeowners who can't find their next move up or trade up home, so they communicate this with the developer's Realtor, and until that time happens, there can be no deal in place. 

However, not all is lost!  From my experience, there are many developers who hold on to properties for a period of time, and can wait out time. They purchase one or two properties in a given year, and other neighbouring properties they acquire later, sometimes many years later, depending on the expanse of the project.These are usually the bigger players who have deeper pockets to do this, who are engaged with multiple projects simultaneously. These developers are the ones with a strategy or a plan in place and will need the time to develop large scale projects.

Other developers, however, look for development projects with a specific time frame in mind and cannot wait for years to assemble. They have a specific budget, with a specific time to acquire, plan, break ground and build, and typicaly work one project at a time.  Finding the right developer for your land assembly is the key to success!  

It's anymore just  your LOCATION, LOCATION, LOCATION, but your OCP, OCP, OCP!

In real estate, they say that LOCATION, LOCATION, LOCATION is a key element when purchasing a home.  This is true!  There is a difference between for example, Kitsilano and Shaughnessy, Point Grey and Dunbar. There is a reason why some homes are more expensive than those in Dunbar, Point Grey, Kitsilano and even Shaughnessy!  It is the fact that developers can do more with an assembled group of properties like build a six storey building, because of its OCP.  

When buying real estate, this is something you should now consider.  In a few years time, do you want to capitalize on your home being sold to a developer-- or not?  Most people would want to take advantage of such a windfall when selling to a developer. If you are one of those people who aren't keen on selling to a developer, perhaps seeking a property, when buying, that is not on the OCP is something you would want to seek. Make sure your Realtor knows this!

I have seem properties being sold for way more than a property in Vancouver's Westside only because of its associated OCP, lot size and future development potential.  This is a key element for developers.

For more information, attend my free annual land assembly seminar, call or text me at (6044) 764-6873 or purchase my ebook for $19.99!!!

"Best and Final"--What This Means by Geraldine Santiago 

What do the words “best and final’ in real estate/ land assembly mean? In a land assembly, developers work with numbers to see if a project is viable. They look at best and highest use, future land use, and anticipation of future benefits.

Let’s say for instance, you have been countering an offer with a developer. How many times can you counter? They would most likely counter only once. There is also a time frame when the developer would like to see everyone on board in a land assembly so it doesn’t drag too long. Remember, whenever you counter an offer, you are taking the chance that your the previous number is now off the table.

With the counter, I’ve seen the developers come back with a price and the words, ‘best and final’. What does that mean? In truth, it is difficult to say. You will need to discuss with your Realtor as to what this means to your situation. Usually when the say 'best and final', there is no further negotiating, no further room to move by the developer. In other words, you take it or leave it and the developer walks away.

When you look at your offer, how far off are you really, with the developer’s last counter and what you want? Should you counter their best and final? Are you willing to risk it, and the possibility that the developer walks away— and they are known to walk away! Is the offer on the table something you can live with? What exactly is at stake for you? Are developers lined up with an offer at your door, or do you have to wait for the next developer? If so, when?

In general, in real estate, the best and final means that is the highest and best offer you will get from the other party. Should you counter? This is a heavy question. Remember to look at the entire contract as a whole, the terms, conditions, length of subject removal timelines for deposits, etc. These are all part of the contract so it just shouldn’t be the price, even if it is mostly about the price.

It is also lost opportunity. Will you see another offer like this again? What is your property worth if you were to sell it on its own? Look at present, active and recent sales in your area to give you comparable price points if you were to sell your home on your own.

Remember, even if you wait for the next developer to write an offer, you may not get the same terms and your neighbours may have changed their minds about selling. These are things to consider when you hear the words, ‘best and final’.