Price for Developer Buy of Property

[jjreal]

I have a two flat residential building adjacent to a parking lot that a developer is interested in purchasing. He is offering top market value, in his opinion based on comparables, for a property similar to my property. How do I figure out what a good price to sell to a developer is? This is a little different then a regular house appraisal since a developer is buying it. They are planning to knock the building down and build condos. I just want to maximize my profit and make sure I make a well informed decision. I just am not sure who to contact.

[Boston Condo Guy]

Perhaps you could speak to someone in commerical real estate in your area. I imagine that it's speculation as to what exactly would be placed on your property, but you should be able to establish some fair estimates as to the income the potential property will generate for the developer.

Oftentimes, cities have zoning limitations as to how many units can be placed on a property, and that would obviously impact the income the developer could obtain - these are all things a commerical agent should be able to guide you on.

[coldcoffee]

I would suggest buying a book on real estate appraisal. Secondly ask the interested party exactly what his building intentions are. Say he wants to put up
10 townhouses. Find a smilar property in the same area,and see what it appraises for. Then subratct the land value. Now subtract the newly acquired land value from your land value. Add the subtracted number to your land value. You now have a very close ball park number as your asking price. Of course their are other factors that will play into your final asking price. Remmber you are selling to a builder, only be concerned with your asking price, not his problems such as zoneing,permits,loans etc.........Jon