Please excuse for my bad English.
My house is a corner block. My neighbor want me to sell my house with his house together. How can we share the price? Should we evaluate the house by it land size or what else can we consider to determine the share between 2 of us?
Neighbour Want to Sell House Together
lnq on 29/06/2016 - 20:32
Comments
I think you each have to negotiate the price of your house with the developer/builder etc who ends up purchasing it.
This has been done before, so do some research on the suburbs where it is allowed and see if you can find individual sale prices for each property in the developed area.
Make sure that this type of group sale is allowed in your suburb. This will involve checking planning regulations with the local council and may involve checking other legislation as well.
Get some advice from local conveyancers and law firms as well.
Really it's not up to you to do that leg work. Tell an agent you and your neighbour both want to sell and work out a price you can sell for that you are both happy with. Go through the process individually, but conditionally on the other property being bought to, receive cash, move out. It is up to the person buying to work out what they can do with both once they have them both.
The advantage of the group sale is that more developers will be interested if the land zoning/seize etc is suitable. They will be able to purchase all houses at once rather than one at a time which makes their development opportunity quicker turn around.
The sales and valuations are done individually but you'll share an agent who will offer the places as a "package deal" which could entice developers who are after an extra large block.
As to whether your blocks are suitable will depend on zoning and a bunch of other things. Easiest thing to do is for you and your neighbour to go and chat to a Real Estate Agent together - they'll give you the info you need.
You need to get a valuation of each property from a few different sources. Then take the average value of each house.
House 1 = $250k
House 2 = $300kTotal = $550k
House 1 = 45% of total
House 2 = 55% of totalSet a reserve. Any money over that gets distributed by the agreed % values. I have read that selling multiple blocks can get up to 30% more than if selling the blocks individually. Good luck.
This is a great idea, nothing could possibly go wrong….
Chuckle, getC… mmmyeah, potential recipe for disaster I agree… but real-estate is not my game. Obviously you could not pull something like this off via an auction, but I think via contracts a savvy real estate agent and developer could get the 'joint sale' done/negotiated; as long as both sellers were happy with the amount they would receive/everyone was in the same room when the deal was 'signed off'.
I reckon 'Euphemistic' (see comments above) is right on the money re the potential benefits. I believe these could equate to tens-of-thousands more for both parties.
I also reckon that 'pointscrazy's' advice to "get some advice from local conveyancers and law firms as well" is perhaps a tad cavalier. Obtaining 'advice from multiple law firms, and multiple conveyancers' would cost a substantial amount of money. Neither of these types of groups would be willing to supply extensive information based on your particular circumstances (which is what is required) for free, because they are not the ones that will make a commission when the properties are sold.
So basically I agree with those above who have suggested that you go to real estate agent together, and ask their opinion on all aspects of the sale that you are curious about. They should be willing to devote a lot of time to you two land-owners, for free, provided you are serious about the endeavor.
One last thing. 'Dozingquinn' suggests a very wise/objectively determined/scientific method of determining who should get how much after the sale of both properties, regardless of the sale-price. I think Dozingquinn has explained it well, but I will reword it just a bit, in case it helps.
Step 1. Get independent valuers to value both properties, seperately (real estate agents will do this for free).
Step 2. Compare the valuations of each property, provided by each RE agant, and calculate an over-all 'RATIO'; the amount that the RE agents think one property is worth, compared to the other.
Step 3. Agree on that ratio, with your neighbour.
Step 4. Get a RE agent to find a developer-buyer for both properties, and draw up the contract that stipulates how much each party will get from the sale, based on the aforementioned ratio.
Note that the ratio WILL NOT be based solely on the actual area of each property… there are numerous other considerations that come into play (quality/age of the house, easements, views, frontage, access, council approvals, etc. etc.)
Step 5. If it was me, at this point I would pay an (entirely independent) expert in the field to look over the arrangements/agreements that had been made so far, just to make sure I was not about to be shafted/scammed. I guess in a way, this is in line with "pointscrazy's" advice above.
Getting advice from some sort of expert is a good idea. I named conveyancers and lawyers as these professions have probably had experience in these group sales.
I think you've done a good summary of the advice.
I am thinking like this:
Evaluation value:
House 1 = $250k 45% of total
House 2 = $300k 55% of totalTotal = $550k
Sell both at 900k for example, earn extra: 900k-550k = 350k
Owner of house 1 get: 250k + 350k / (% of land size of house 1)
Owner of house 2 get: 300k + 350k / (% of land size of house 2)My argument is, developers after all they are looking for position of land, and size of land.
So the extra earning should go more for whoever have better position and larger size.
Isn't that the point of valuation? House 2 is getting valued more than House 1 because of position, land size, etc.. Why are you re-valuating again?
Consider developer point of view, developer will demolish everything, only land size + land frontage effect the value that developer who willing to pay more for it. The extra earning here is the strip down version of actual evaluation, land size + land frontage play the ONLY role here.
You have a valid point if you look at it that way. However, many points can be argued otherwise because you are not comparing apple to apple. It is not a piece of bare land that you are trying to sell that only size matters.
Get 3 market appraisals from 3 estate agents.
Take the average for determine fair market value between parties.
Use that as the yard stick for the proportion of what you get from the sale. That's how we advise clients as it's fair and reasonable, especially when you're dealing with outsiders.
You'll want a written contract with the other seller. What happens if one of you pulls out at the last minute because circumstances change? What about marketing or auction costs if the sale doesn't proceed? Who bears the risk if one house burns down after exchange but before settlement? Even with the best will and intentions by you and the other seller, things can go wrong, so it's best to have these all documented up front.
The last thing you want is to sell the properties and then have a dispute with the other vendor. The shared real estate agent will be working for you both. I agree that the cost of having an expert (eg a lawyer or conveyancer) working just for you should be worth it, even if just for the peace of mind.The problem is my land is considerable bigger than my neighbor land, almost double in size and triple in perimeter, 3 sides street facing. Potential for high rise building approval (close to train station).
I think you two can join and look for a realty agent and they will find you are buy, the value will be determined individually.