Guide to selling a development property

When it comes to selling your property, it’s natural to hold some priorities and conditions in your mind before you bring it to the market. For some sellers, these elements will be influenced by your position, whether that’s wanting to sell quickly because you have a purchase lined up for your next home or being selective about your buyer’s intentions out of love for the property. The same rule applies not just to your own circumstances as a seller, but also to those of the lot in question.

When selling a development property, the priorities and conditions that drive the sale will differ dramatically from a sale of a residential or commercial property. Things like the potential value of the lot, if it appeals to developers, and how these buyers can be reached and marketed too quickly become the most important considerations. 

At SDL Property Auctions, we know that selling this type of property brings its own unique advantages and challenges, and we are here to provide new (and experienced) sellers with support and advice on how to navigate these. So, if you have a property or plot of land perfect for development and aren’t sure how to sell it, join us as we take you through your options.

What is a development property?

There are two main types of development property, both of which we regularly see and sell at our online property auctions. These types share the main characteristic of being appealing to developers for purchasing thanks to the potential they offer, making them a good investment for those who have the knowledge and financial backing to realise that potential and turn it into profit. The two types of development property we see are:

• Underdeveloped, derelict or run-down properties. Buildings which don’t meet current living standards but are situated in good areas, have natural characteristics that add to their charm, or have other attractive features make for ideal investments. Developers will seek these out with the intention of renovating and reselling or renting out to generate a profit. 
• Plots of land with potential for development. Land poses an attractive opportunity for developers looking to build something new. Factors that buyers will consider for land include what local amenities are already available, the level of housing availability and need, accessibility of the land, and the practicality of building on it (such as whether it’s the site of an old mine, or the makeup of the soil and ground). 

In both of its forms, development property can offer sellers a chance to achieve a sale that is beneficial both to them, and to the developers that purchase them. However, in order to get the most from your sale, you’ll want to pay attention to your sale method.

How to sell a development property or land

When it comes to selling your property, whether it’s a building or land, your priorities should be price, speed and security. In the case of development lots, the safest route to secure all three of these is by selling by auction. 

Property auctions are the speciality route for development property. Commonly associated with unique and exciting properties that are full of potential, developers of all kinds flock to auctions to find their next project. It’s because of this that taking your development lot to auction is akin to putting it directly in front of your ideal audience. Here, you can make the most of increased competition (which drives price), an agreed deadline (which improves speed), and contractual obligations (which ensures security). It’s the perfect recipe for success.

Broken down, the benefits of selling a development property through auction include:

• Targeted audience exposure. The importance of attracting the right audience to your property can’t be overstated. Due to their nature, development properties are often unmortgageable, meaning the average buyer won’t be able to complete the sale. Professional developers, however, have access to more stable finances, and can either secure alternative financing to fund the purchase, or have enough cash to complete the sale outright. These types of buyers are more commonly found at auctions, improving your chances of securing a sale.
• Greater competition. Since developers frequently attend auctions and keep an eye on catalogue listings when looking for their next project, you’re more likely to find multiple buyers interested in your property at auction. When this happens, the sale price of the property can ramp up as they try to outbid each other. 
• Improved speed. Selling by auction is a very fast process. From getting your initial valuation, listing and advertising the property (all of which we take care of for you), to auctioning, exchanging contracts and completing the sale (which is done under the security of a binding agreement as soon as the hammer falls to eliminate the risk of dropping out), everything proceeds with precision and surety. This not only helps with confidence that the sale will go through without a hitch, but it also reduces the time over which any property running costs need to be paid, saving you money. 

Take the first step to auctioning your development property

As with any sale, selling at auction starts with getting your property valued. At SDL Property Auctions, we offer free, no obligation valuations to all our potential sellers, helping them to understand how much their property could be worth at auction. From here, we’ll talk you through the process of selling at auction, provide detailed guidance on whether or not it’s the right choice for your circumstances, and move things forward if you’re ready to proceed.