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  • Refurbish/Develop

    Auction or private sale for development site?

    Hello everyone,

    Has anyone got any tips, opinions or comments on the best way to market and sell our small site in South London? We’ve had some rough valuations and been told we can expect offers of over £350k. It's a former car workshop and yard, we’ve now got Prior Approval under the Permitted Development regulations to convert the 2 workshops into 4 small residential units. Any buyer's likely to want to submit planning to knock them down and build on the whole site.

    What's likely to bring the best price, auction or inviting closed bids in a set timeframe?  And if closed bids should we use an agent or could we just advertise it ourselves and just having a solicitor to deal with the sale?  We've had a notice on the gates for a while so quite a few developers etc have already contacted us.

    Any comments on fees / costs etc?  Or recommended auction houses, agents, solicitors etc?

    Also, auctions seem to have the advantage that the sale is pretty definite as the buyer has to immediately put down a 10% deposit.  Whereas a private sale buyer only (usually?) puts down a very small amount (if anything) in return for about 28 days exclusivity while contracts are exchanged etc.  So might we get a buyer who has trouble getting finance (I've heard it might be harder for PD approval sites?) and then drops out?

    Any comments welcome!

    Thanks

    Lee

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    If you want a straight forward sale find an estate agent with a commercial section dealing with such properties.

    Trying to sell it yourself will just cause you hassle as commercial property is not as straight forward as residential.

    The agent will have the right contacts for people interested in this type of property so just let them get on with it. Those parties interested refer them to the agent and let him do the work.

    I expect the private ones will say lets do it without the agent to save comm. but are you experience enough to do such deals. Auction good way to sell quickly but you need to have a price you are willing to sell at.

    That's why use an commercial agent who should save you the hassle of time wasters who don't have the money.

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    Apologies for not replying!  I was a beginner to the site and I (wrongly) assumed I'd get an email whenever anyone replied to my post.

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    Hi Lee

    Like you, I am new to this site (and very helpful it is).  My husband and son would be very interested in your site as they work in South London/Surrey.  It would be great if we could discuss this with you privately.  I don't know how to do that on this site?? We have cash to buy and a small site like this sounds very interesting

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    Apologies for not replying!  I was a beginner to the site and I (wrongly) assumed I'd get an email whenever anyone replied to my post.

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    Hi Lee, there are advantage and disadvantage on the auction, as using agents or private sales.

    Auction is more quicker and as you suggested is binding on the auction winner, but you may realise less.

    Agent, for a site like that, you need to use specialised/niche agents, and I guess commission are around 1.5-2.5% etc

    Private sale may restrict you audience/number of investor/developer that you reach.

    A site like the one you describe, is mainly a cash purchase I would suggest, or someone that can prove has credit line or asset to raise money against.

    To realise the most, you may want to exploit a route where you accept an offer "subject to planning" from a developer, or you even exploit the route to do a joint venture with a developer and having a profit sharing agreement on that (I am quite experienced on that).

    Anyhow, if you want, without any obligation I can drive down (I live in SW London), you can show me the site, we can have a coffee at a local coffee shop and talk about the sire and opportunities that may suit the best.

    I am trying now to send you my private contact with a private message via the Forum.

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    Apologies for not replying!  I was a beginner to the site and I (wrongly) assumed I'd get an email whenever anyone replied to my post.

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    Hi Lee, no worry. What you have decided/route taken on the site?

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    HI. We eventually sold via auction and we were happy with the result.

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    Hi Lee

    Can you come back and confirm whether you want any potential buyers from this thread?? thanks J

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    A good friend of mine has bought similar sites to this around the Clapham/Brixton/Crystal Palace areas at auction and I know that developers like him do their due-diligence before the day so they're properly ready to put their best foot forward and follow-through with the deal.

    Obviously, in areas like SW London there are loads of estate agents who have developer clients on their books who are gagging for opportunities like this so there's nothing to stop you just asking around to test the water.

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