Sales agreements: striking the best deal
There are many good reasons to opt for a leasehold, but our open-ended consulting process sometimes reveals that selling the property is, from an overall perspective, a more advantageous approach.
When selling building land, it is important to make optimum use of the property. In many cases, this depends on the potential utilisation and legal authorisations. But finding the right buyer is even more important.
It is possible to find buyers for undeveloped land who have their own planning ideas. But an initial, visionary phase of project development paves the way for attracting a far more discerning and financially strong clientele of prospective buyers for the same plot of land. Hence, we offer landowners the option of concluding a sales contract under certain conditions: within a specified period of time, we will endeavour – after acquiring the rights to purchase the land in exchange for securing additional proceeds for you – to make the property even more attractive for the market based on our ideas and planning. With a development guarantee.
Sales agreements: how they work and what advantages they offer
- You grant us the right to purchase the building land within a certain period of time and for a specific price.
- This price is higher than it would be for a direct sale.
- We issue a development guarantee: upon completion, you will receive an advance payment, depending on the agreement, or you can negotiate a penalty to our disadvantage if we fail to come up with a successful development plan.
- Scenario 1: We make use of our right to purchase and buy the property at a higher price than what could be obtained with a direct purchase. This is the most common scenario, as we only make a purchasing agreement if we have carefully considered such an investment in advance.
- Scenario 2: We do not make use of our right of purchase. In this case, you will keep our advance payment or we will pay the agreed penalty to you. You will then have the option of selling the land to a third party.
- Whatever the outcome, you will benefit financially: either from a higher sales price – or from the advance payment/penalty, which you may keep.
Why do we pay more for the right to purchase than for a direct purchase?
We see potential in your property. However, this potential only becomes apparent to many investors once project development is well underway. During the period stipulated in the sales agreement (for example, for a period of two years), our architects and project developers draw up an ideal plan for the use of the land, for instance, by developing project ideas, and they contact potential investors. This early phase of project development enhances the value of the land – but only if investors see the same potential in the property that we do. We invest a great deal of time and money in an advance effort with no guarantee that it will pay off for us. We can only initiate this project development phase if we have the right to purchase the land. If we were wrong in our assessment and cannot develop the project successfully, our investment is lost. But you have benefited financially. If we were right in our assessment (as is usually the case), our efforts will, of course, have paid off.
Want to find out more about sales agreements?
Take this opportunity to arrange an individual consulting session with us.
Our real estate, legal and tax specialists will review your property’s potential and make a recommendation that is tailored to your situation.