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How can you decide if a developer’s offer for your home is fair?

On Behalf of | Jan 7, 2022 | Real Estate

The community where you live has likely changed substantially since you bought your home. The longer you have lived there, the more drastically the characteristics of your neighborhood may have shifted.

What was once a relatively rural area may have experienced infill and now has dozens of homes and businesses as well. An area that was once residential may now be increasingly commercial due to zoning changes and a new business opening a few blocks away. Changes to your neighborhood will affect any future attempt to sell your home.

Does a developer have plans for your property?

Although many people sell their homes to another family or an investor who wants to rent the property out to others, sometimes people sell their homes to developers.

A developer will likely want the land and may have a large-scale project in mind, like the construction of a large facility or an entirely new residential neighborhood. How can you make sure you get a fair offer for your property from a developer with big plans for your parcel?

You need a realistic view of the local market

One of the first things you need to do when evaluating a real estate offer is to figure out the current state of the market in your area. Neighborhoods in transition, in particular, may see dramatic shifts in real estate values. You may not currently have a realistic idea of what your home is worth.

Looking at the sale of other properties nearby can help. So, too, can looking at the income generated by projects like the one that the developer has planned. When you understand what the project will mean for the company and what you can likely sell your home to someone else for, you will be in a better position to negotiate a purchase agreement. 

Look at the details and not just the price

One of the biggest mistakes that people make when they negotiate a real estate sale is that they only look at the amount offered and don’t go over the contract in detail. There are many other terms in a real estate purchase agreement that could affect your right and potentially diminish the value that you received for the transaction.

Having someone who understands contract language go over your purchase agreement before you sign anything can help you avoid approving something that will ultimately disadvantage you. Thinking carefully before committing to anything in a real estate transaction will help you protect yourself and one of your biggest investments.