Anonymous interview: Dealing with brokers and developers
We ask an anonymous land seller about his experience with meeting and negotiating with land brokers and developers.
When was the first time you thought about selling your land?
I had never thought about it–I was approached first about two years ago, roughly.
What sort of people approached you and how did that go?
One was a Land Broker. He came forward, but I had never thought about selling. They came about eight years ago, then just before we started the deal 2008 happened. Basically everything went wrong. Then about two years ago another broker and developer approached me, they were begging, but in the end it didn’t go through.
So the first time, did they tie you in with an option, how did you agree to sell it the first time?
They had an option, either eighteen months or two years.
At the moment the land is available and nothing has happened to the land?
No. No. They first came and offered a higher price, then they came back and offered a lower price.
And how much lower was the price?
About £200,000 less.
What was the value of the land?
Initially they offered £1.2 million, and their second offer was only £1 million.
Was there a reason why?
They said the building costs and project expenses are rising. So I said forget it because I’m not keen to sell.
When the developer approached you, what sort of research or due diligence did you do on him? How did you know about him and did you check on him to see if he had the necessary finances?
Well, it was for a well known company.
Okay, so they’re well established?
Yeah. The broker was for a well known company, so I am aware about that company.
So did you have confidence in the company?
Yes, but when I read about them online, they didn’t have good feedback you know?
Right okay, so you did some research on them?
Yes. It wasn’t a very good review that I read. However, I still went to them because they were coming over constantly, so in the end I went to meet them. It didn’t work out due to a complication with a neighbour.
What has been your biggest challenge with the process?
Brokers and developers not sticking to their word–they say things, but they never stick to it. It’s very frustrating. They came back again and said they’ll pay less; I said no, I’m not willing to go any lower.
Is there anything else we can learn from your experience? Because it sounds like the common thing that’s being experienced by land sellers.
Land agents, like the companies, are very, very pushy, they want me to sign and when I tell them my concerns, they are not willing to listen. I tried to phone the agent and I tried to explain my situation, but he doesn’t want to listen, that’s why I refused to talk to them.
Of course, it’s a waste of my time and effort. I run and manage a business, so negotiating a land deal is a headache.
And how did you feel about negotiating by yourself?
I knew what I was doing. That’s no problem.
You’re not afraid of the negotiation process?
No, what can they do? It’s my property, they can’t do anything. But they were very annoyed when I didn’t go for it. They were very pushy. It wasn’t a pleasant process and I didn’t appreciate that.
Was that the agent or the developer?
The agent, it’s not the developer.
So you’ve always liaising with the agent?
Yeah because he was very keen to get the money–if he sells he can get the his money.
Did you deal directly with the developer or was it always via the agent?
Originally I was dealing with the agent, but because of his behaviour, I refused to talk to him and I went to the directly to the developer.