ANONYMOUS INTERVIEW: Chipping the price and landowner fear
Each month TrustedLand gives buyers and sellers the chance to go anonymous to offer an entirely open and frank view of the land buying process. Transparency is the key, in this months 'Land Buying Exposed' feature.
Describe the last time you met a disgruntled landowner?
I have never met a disgruntled landowner. I have not had any barriers to sourcing land. If there is a willing buyer and a willing seller following an introduction by an agent, then a deal can be made. Solicitors do 95% of the process. The valuation of the site is through the Red Book Valuation which is a fact of the market. In the 80-90 deals I have done I have never had an unhappy seller, even if I chipped the price.
What do you think a landowner’s biggest fear is when selling land?
The majority of my deals (around 60) have been private. I’ve gone into a bid for about 20 deals. What matters is if you have cash and can deliver.
My deals mainly come from banks where a desktop red book valuation is done. I usually offer around 5% below the valuation.
There are a lot of tools and information available to buyers and sellers to study and get advice that remove fear. Plus banks also do their due diligence before the lending offer. There are so many processes to go through that market filters things out. The property market and level of information are saturated. There are about 27 property programmes and 30 property portals.
In today’s world buyers and sellers have the protection of solicitors, surveyors, red book valuation etc.; reducing fear.
What has been your most challenging land buying experience?
The most important thing for a developer is planning permission. Every council has its own planning process and what might work in one council may not necessarily work in another.
I don’t believe land banking exists in a way that affects developers and land sourcing. Land bankers are usually farmers with 3000-4000 acres or Lords. Plc. house builders need to be accountable to their shareholders. Landbanking impacts on their balance sheet.
How do you feel agents can add more value to the land purchase?
The function of the agent is depleting every decade because of the amount of information available on the internet. A lot of people that are good at what they do go to planning portal, land registry etc. to get information. It is the only part of the market that doesn’t need a qualification.
Their role should be to find proper deals that they can give to their most reliable clients. The market is becoming more sophisticated by the larger agents. Nowadays agents accept 1%. 20 years ago it was 3-4%. Their value in the market has dropped.
I use bank valuers to source my land. I look at about 80 deals per month. Bank valuers are closed network and more respected than agents. They pass deals to past performers. They supply deals before they come on the market or coming to the market soon.
If a deal is greater than £10million, they get 0.75% of the purchase price. If a deal is less than £5million, they get 1% of the purchase price. In the property land buying/selling market, there is a large element of trust and reputation and aggressiveness. If you are not aggressive, the market will not respect you.
Look at buyer - can he perform, is he good, is he resourceful, has he been in the game for a long time?
What do you believe can be done between buyers and sellers to improve the land buying process?
A willing buyer and a willing seller result in a positive experience. Buyer needs to do his due diligence and be ready to act. Seller needs to be prepared to respond quickly. If both parties are willing, this process happens quicker.
The challenge in the land buying process is that each council has its own planning policy and way of working and what might work with one council can be a barrier to another making a property deal risky.