Dealing with QLD Land for Sale Developers: 4 Things to Watch Out For

If you own land in an area in Queensland with a huge potential for growth, you may already have investors wooing you to sell your property. Regardless if you have a one-hectare or one-hundred-hectare piece of land for sale in QLD, you’ll naturally want to make as much money as you can, and fast. However, you need to tread carefully, because developers can steer you into a much longer and broader game that’s considerably less advantageous for you. Here’s what you need to watch out for.

A straightforward option agreement

A straightforward option agreement plays into the developer’s favour. Choose a conditional type of contract, as this compels the developer to buy your land from you before a set target date. It also requires them to adhere to the ‘best practices’ of securing planning permission.

Gross value figure per acre

Also known as the “headline price,” developers typically take off 10 to 15 percent of the headline price to pay for the work involved in securing consent. Very rarely will a developer agree to pay for the headline price in full.

‘Extraordinary costs’

Depending on the geological conditions of the site, part or all of it may require the creation of certain structures, which the developer may have you shoulder. For instance, if your property is inhabited by endangered animals, the developer may be compelled to create a new habitat for them or implement measures to move them to a new location. The developer will likely ask for a deduction, and should you decide to accept, you need to make sure the cut they intend to make is fair and reasonable.

Exclusions

Expect developers to attempt to get as many exclusions into the deal as possible. They do this to drive down the final net price. If you’re not careful, you can lose as much as 50 percent of the total acreage, with the developer claiming that that much portion is ‘undevelopable.’

Granted, selling land to a developer can be an extremely lucrative undertaking, but the process can be difficult to navigate on your own. If you do not have any background in real estate selling, you could easily get the short end of the stick. For your own protection, it pays to partner with a Queensland land for sale specialist who can represent your interest.

Sources:
Top 5 tips for selling land for development, RealEstate.com.au
Developing Real Estate: How to Price Land for Profit, BiggerPockets.com