Is There A Way We Can Make This Happen?

Firstly, a bit of background.

We have an acreage property (our PPOR) that is currently listed for sale. This is our second attempt; our auction last year failed to meet its reserve. Due to the lack of comparables, this time we are employing an "Offers Closing" methodology.

We have had four Opens so far - 32 parties have attended and 12/13 have stated they are interested (the rest don't have budget, were tyre-kickers/neighbours, ...). As yet, none have submitted an offer. The REA believes we will see three maybe five in the next week or so, between now and the Closing Date. The REA says, if we are extremely lucky, we might even get as many as eight Offers ("Tell them they're dreaming").

One party who the REA believes has the most interest wants to submit a cash offer (they are old school) but they want/need to sell their current acreage PPOR to developers in order to do this. We understand that our potential buyer and the developers are in serious negotiations via their solicitors. The settlement of their property will occur way past our Offer Closing Date.

Obviously, we want to net our "biggest fish" as they will hopefully help push up the Offer price. We are very flexible with terms and conditions (not quite so much with price).

Options (in decreasing order of preference) we have discussed with our REA are:

1. Get them to submit their cash Offer with a long settlement period. We would be prepared to consider up to a nine months settlement, maybe even longer. No perceived movement from our buyer (they are old school ).
2. Let offers close and use our most attractive offer as leverage. That is, the REA advise this potential buyer that the vendor is looking to accept an offer and they will miss out. This approach will only work if we get at least one attractive Offer to use as leverage.
3. Do a property swap. We take over their property and deal with the developers and the potential buyer takes over ours. We haven't done any due diligence on this but it has increased risk for us (we could be left holding their property, not what we want, especially long-term). I would imagine that Stamp Duty would probably make this option financially unviable. Also, the REA wasn't keen to wait until the settlement of that property before they got their commission . The whole thing could get messy.

So I am appealing to the PC brain trust. Do we have any other options we should consider?

 

The property swap would mean extra stamp duty for you? And if the developer sale fails or is less than expected.... sounds like a lot of risk.

 

Yep, the property swap would mean S/D for us and, as I posted, probably make this option financially unviable.

The risk of the developers pulling out is something that would most likely kill this option. That is why I listed it as No 3, our least preferred option .

I am just scanning the universe for options - hopefully, people will suggest some, and also post the pros and cons.

 

What about
a) subject to them selling by a certain date
downside for you is you lose the other buyers if they don't sell in time
b) granting them an option to purchase.
If they don't buy you get to keep the option premium, but still waste the other buyers
c) a dutch auction - accept their offer, but don't sign contracts with them and use it to motivate other buyers
d) suggest they get a bridging loan so they could handle 2 properties for 6 months. Lock them in

 

If the developer fell through, you would then be up for commission to sell the second property.

Sounds like a risky option.
Marg

 

The developer would be going down the path of an option subject to achieving a DA,so settlement could be years away.

If you can get an offer subject to something tangible just a delayed settlement you could consider the offer otherwise they're out of the running.

 

Get more exposure/advertising to cashed up Sydneysiders... they can afford your acreage.

 

Like you, with a) and b), I would be worried about the “other fish” jumping out of the net.

I like c) but I don’t think they will put pen to paper until they have sold (being old school).

I didn’t think of d). I should have, so thanks.

 

Totally agree. I don’t think it will ever “see the light of day”.

 

From what I have been told, properties on both sides of their’s are already undergoing development.

But I do take your point. It could take some time before they see the money.

That wouldn’t suit our plans.

I tend to agree. Thanks.

 

We spent some serious funds last year marketing the property in Sydney and Melbourne.

It didn’t achieve much success. So we were a bit loathe to blow that amount again.

 

Bummer

 

Friends had experience of the “developer” situation, they owned a small acreage in Rochedale in the development zoning. All offers were highly skewed in favour of the developer and time lines were vague - options, contracts with very long settlement etc. Seemed they were just trying to tie up as much property as possible on long time lines with terms favourable to them.

In the end they were happy to get a good offer on a standard contract, to an investor looking long term.
Marg

 

That is what I am afraid of.

Our potential buyer’s acreage is in Rochedale as well .

Thanks @Marg4000.

 

You could always post the listing within this site and see what happens..
The Dutch Auction would work on the Gold Coast ..

 

@kierank's house will be worth every penny whatever the buyer pays.... it's no expense spared..... automatic blinds, automatic lights, multiple level settings for lighting, amazing theatre room, extremely spacious, very beautifully presented.... lots of features you don't usually find in many houses.

Sydneysiders and Melbournians take note.....

 

Cockie, I would say like most on the market in that area they are all high end properties ..
Maybe my mate Datto will sell up the empire ,and move ..

 

Apparently the wife wants to take me with her.

She says I am a keeper .

I have been told that is non-negotiable .[/user]

 

@kierank How did you go?
Marg

 

Thanks Marg for asking.

Things have moved forward but we do not have a definite result just yet.

We are hopeful we will have a positive answer in the next 3 to 5 weeks.