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 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.
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.