How To Sell Land To A Real Estate Developer?

Posted on Nov 27, 2023 at 10:03 am by James T

You want to sell your land that you no longer need to a real estate developer in order to make the most of its value. Indeed, this solution will bring you many advantages, especially if your plot is located in an area with good potential for developing real estate projects.

The steps for selling

By calling on a developer, you will have the opportunity to receive payment quickly and limit financial risks regarding construction costs, delays, and uncertainties related to the real estate market. In addition, the sales process will be simplified.

By concluding a sales agreement, you will be able to participate in the profits of the project developed on the building land. This can be in the form of a percentage of sales or profits. Before you start, it is important to properly evaluate your land, so you will need to consider various criteria that can influence its value such as:

  • its location,
  • its area,
  • its topography,
  • local authorizations and zoning.

You must gather all the documents concerning your plot, particularly the property title, topographic surveys, zoning information, urban planning authorizations, etc.

The selling price must be realistic, so you will need to take into account the market value, the characteristics of the land, and any potential costs related to the sale. Negotiation can focus on payment terms, deadlines, price, etc.

All these aspects must be understood before signing. The developer will establish the viability of the project on the land; feasibility studies, market analysis, environmental studies, etc.

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Building land and constructible land: the differences

First and foremost, you need to know the difference between the terms “building land” and “constructible land,” which are often used interchangeably because they refer to land on which construction is allowed.

However, in certain legal or administrative contexts, there may be nuances. Here are some explanations that will help you avoid mistakes when buying or selling.

Building land or serviced land

Building land refers to land on which it is possible to build. It can be understood as zoned land or land intended for construction. This plot must be located in an urban, rural, or peri-urban area.

Construction is allowed according to the local urban development plan. The land may be regulated or subject to specific requirements regarding its configuration, size, and use. It must have access to a public or private road and connections to electricity, telephone, and sanitation networks, if mentioned in the PLU (Local Urban Development Plan).

This plot must be free of any existing construction. The PLU will provide you with all the necessary information on the buildability of the land and the construction procedures to follow.

Constructible land

Constructible land allows for construction. It is generally located in an area designated for this purpose by the local urban development plan. It can be dedicated to residential, commercial, industrial, or other types of construction.

The plot must meet local and regulatory requirements to allow for construction and have a soil and subsoil capable of accommodating stable and solid foundations.

To examine these criteria, a geotechnical study is mandatory. This verification is essential if you want to sell it, especially in areas with clayey soil.

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