Are you wondering “What if a developer wants to buy my house”? Why might you consider selling your home directly to a property developer, rather than through an estate agent? Well, we can think of at least 10 reasons!
Why should I sell my house to a developer?
What is a property chain? A property chain is a series of house purchases that are linked to, or reliant upon each other. ‘When you are in a chain, buying or selling a house depends on the purchases either side of your property’.¹ For example, first-time buyers don’t have a house to sell, so they might ‘start’ a property chain. On the other hand, a person who is selling a house, but not buying a new one (for example because they are moving into rented accommodation, or selling a second recently-inherited property) would form the ‘end’ of a property chain. A chain will always involve a minimum of two (seller and buyer), but as you can imagine, a property chain can and does get rather long and complex!
What is a property chain?
A property chain is a series of house purchases that are linked to, or reliant upon each other.
‘When you are in a chain, buying or selling a house depends on the purchases either side of your property’.¹
For example, first-time buyers don’t have a house to sell, so they might ‘start’ a property chain. On the other hand, a person who is selling a house, but not buying a new one (for example because they are moving into rented accommodation, or selling a second recently-inherited property) would form the ‘end’ of a property chain.
A chain will always involve a minimum of two (seller and buyer), but as you can imagine, a property chain can and does get rather long and complex!
A developer does not need to sell a house in order to buy yours (they will sell the completed development later of course, but that won’t affect your sale). Therefore by selling to a developer, you are not reliant upon a chain of property purchases to happen before yours can proceed.
2. Less risk
Because developers are not tied into a property chain, there is less risk of your sale being delayed or falling through because of a ‘collapse’ in the chain.
3. Set the pace
A reputable property developer will discuss your plans and concerns and work with you to develop a timetable that works for you. For example, you might ask them to consider how much longer you wish to live in your home.
4. Clarity and communication
Any property developer worth their salt will propose a legal agreement with you once you have decided to work with them (you can read more about this in our FAQs). This is ensures that you have the security and transparency of knowing exactly what comes next. The developer should ensure that you understand fully what this agreement means and answer any questions that you have. They will also advise you to seek independent legal and financial advice.
5. Release equity without moving
While not always possible, if your home has a particularly large garden, a developer may consider buying this land (or part of it) for development, meaning that you could unlock the value of your home without having to move. For time-poor home-owners, a more manageable garden can be an added bonus!
6. Release equity by down-sizing
Lloyds research from last year found that owners of homes ‘in the South East have the most to gain from shifting to a smaller home‘. This research is based on average house prices and assumes the down-sizer owns their home outright. Which? reports that with no mortgage on the house they are selling, the average house owner stands to earn on average £273,466. A rather attractive proposition for empty nesters!
7. Sell your home without redecorating or renovating
If your home is in need of serious modernising or has issues such as an unstable roof, chronic damp or urgent electrical issues, you would need to address these at considerable cost before selling via an estate agent. However, these are unlikely to be of concern to a developer, especially if they are proposing demolition before building a new property on the site.
8. No middle man
We’ve got nothing against estate agents personally (the good ones that is!), but the reality is that if you sell your house via an estate agent, you:
- will need to pay a commission/fee
- are likely to have to deal with multiple viewings of your home by potential buyers
- may find that it takes longer to sell your home than if you sold directly to a developer
All of this can add to the stress involved in any property transaction.
9. You may get more than market value for your home
This is not always the case and depends upon a number of factors, including what kind of planning permission is likely to be granted by the local council. However, a developer may be able to offer more for your property than a buyer found via an estate agent. This is because the developer will be able to make a profit from selling multiple houses or apartments once the development is complete. They take on the risk and costs of the planning, build, marketing and sales and consequently earn a return on their investment. With this in mind, it can be worth a developer offering you the market value, or even more than the ‘asking price’ set by an estate agent.
10. Sell your home faster in a sluggish market
When the housing market is sluggish, it tends to be difficult (and take a long time) to sell your house. In the current climate, if your home is large, with a decent-sized garden, many buyers simply won’t be able to get a mortgage in order to be able to afford it. In a market where house prices are high, but sales are falling, it can be easier and quicker to sell smaller homes and apartments. For this reason, you may be able to sell your home more quickly to a developer who plans to change your large home into several smaller ones.
I would like to sell my house to a developer.
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