If you are in the process or considering selling land you own to developers there is one thing in particular that you need to know about that could save you hundreds of thousands if not millions of pounds.
If you are in the process or considering selling land you own to developers there is one thing in particular that you need to know about that could save you hundreds of thousands if not millions of pounds.
THE BIGGEST MISTAKE MOST LAND OWNERS MAKE WHEN SELLING DEVELOPMENT LAND…
Most land owners miss out on up to 50% of the value of their land when selling to property developers…
Why? Exaggerated Abnormal Costs…
The Final Open Market Value of Land is often greatly reduced by overstated or pessimistic ‘abnormal’ costs assessed by the developer…
These costs are deducted from the ‘Gross Development Value’ of the site to arrive at an ‘Open Market Valuation’ which forms the basis of the amount paid for your land.
Here at Derek Gough Associates we are experts in reducing and negotiating these Abnormal Costs.
BENEFITS OF USING A QUANTITY SURVEYOR TO REVIEW ABNORMAL DEVELOPMENT COSTS
- Increase the Final Open Market Value of Your Land – increase the final value of your land by up to 50%. Which can result in hundreds of thousands to millions of pounds realised.
- Challenging Developer’s Abnormal Costs – we identify and negotiate overstated developer costs on your behalf, saving you time and stress whilst getting you the best price.
- Work hand in hand with your Estate and Land Agents – we complement and support your existing partners.
- Independent Witness – as professional independent cost consultants we are there if your case goes to independent determination.
- We Know Every Trick in the Book – we have years of experience to analyse and assess fair costs to make sure you aren’t at a disadvantage.
- Low Cost, Low Risk – our fees are based on the saving we get for you.
Q: I AM SELLING LAND TO A DEVELOPER, WHAT DO I NEED TO THINK ABOUT?
A: Land owners and Estate Agents want the maximum Value for the land you are selling.
As independent cost consultants, we have successfully helped landowners maximise the return on their land under option agreements.
The final value landowners receive is often greatly reduced by pessimistic or overstated costs assessed by the developer.
Our experience and expertise in this field allows us to analyse cost estimates with confidence that we can generate better value for the landowner of his land.
Q: HOW DO ABNORMAL COSTS IMPACT THE OPEN MARKET VALUATION?
A: The higher the projected cost of Abnormals the less the developer will pay the landowner for the land.
Developers frequently tend to be cautious and overestimate abnormal costs so this makes them a key element that can devalue a site.
These costs are deducted from the Gross Development Value of the site to arrive at an Open Market Valuation which forms the basis of the amount paid for the land.
The higher the costs of Abnormals the less the developer will pay the landowner for the land.
Q: WHAT ARE ABNORMAL DEVELOPMENT COSTS?
A: Abnormal costs are additional or unusual costs that a developer might face when developing a site. For example, unusual ground conditions may mean that deeper and more expensive foundations are needed. These could even include unusual items like archaeology works.
Q: DO DGA CHALLENGE THE DEVELOPER’S ABNORMAL COSTS AND ASSUMPTIONS?
A: Working with Estate Agents, DGA work on behalf of the landowner to independently review and question the developer’s figures.
We use our experience in this area by conducting a thorough cost analysis of abnormal costs.
We investigate all relevant cost assumptions to get them reduced and agree a more realistic price for the landowner
We can act as an expert witness if cases go to independent determination.
Q: WHAT CAN DGA ACHIEVE FOR YOU?
A: On recent Projects we have achieved much higher final agreed Open Market Value for the land by using our negotiating skills with the developer to accept more realistic Abnormal costs.
This increase in value has been significantly higher for the landowner.
Q: HOW MUCH CAN A QUANTITY SURVEYOR SAVE ON ABNORMAL COSTS?
A: Whilst it depends on the project the savings are usually range from the hundreds of thousands to millions of pounds.
Here at DGA we minimise the upfront risk to you with our fees largely a percentage of the saving we make for you.
As an example last year we negotiated savings of almost £5,000,000 on a single abnormal cost related to oversize pipes and drainage. Across the project the realised savings made for Land Owners were over £11.5 million.
Some other savings we’ve helped negotiate include:
- Roundabout – £300,000
- Cycle Storage – £50,000
- Top Soil – £40,000
- Disposal of material to tip – £230,000
As you can see the saving soon add up.
Q: WHEN SHOULD I CONTACT A QUANTITY SURVEYOR?
A: Ideally we would get involved before you sign anything. But we can add value at every stage of the process right through to dispute, even when you think it is too late…
Don’t do anything else until you speak to us to understand how we can protect your interests and get the best price for your land.
HOW TO GET STARTED
DGA are experts with a proven track record in protecting land owners interests. We help protect your land value and make sure you get paid fairly.
You can count on our team for quality, reliable and expert advice. We always have your best interests at heart, ensuring you get paid what your land is worth.
Contact us on 01565 831 999, online or read more about our Abnormal Development Cost Advice service.