By David Lovato, Crowd Property Capital
In real estate, sales vendors are relying on the agents’ ability to understand their property's highest and best use – even more so in a tough market.
Historically local agents have shied away from researching and fully understanding planning controls, such as site Floor Space Ratio (FSR), height limits and permitted uses under current zonings. However, this should be part of all agents' core skill sets, as providing additional services around town planning and development will better assist their vendor.
A few years ago, I enquired with a local agent about a prime dual fronted site in an exclusive beach-side suburb of Sydney. The agent didn’t mention the redevelopment potential of the block, even though a few doors up the same sized block was under construction to build a duplex. This agent didn’t take the time to research his listing to its full extent. By not marketing to developers, he short sold the listing.
To ensure the best outcome for their vendors, agents need to understand and actively market the development potential of their listing, if applicable. Placing STCA on your signboard should only be the start of your marketing plan to developers.
Attending local community events on potential rezonings, understanding local environmental planning and development control planning and having a good understanding of the State Government’s mandated growth areas, will ensure you can advise your vendor of the potential current and long-term value of their asset.
Having a go-to town planner that can look at your listing and provide you with a quick planning overview is also a great way to ensure you haven’t missed anything.
Your vendor will appreciate you explaining all of their options, and providing them with as much information as possible, so they can make informed decisions. You may be able to assist them with a short-term equity release solution enabling them to hold their asset until the market improves.
If your vendor is open to development upside risk you could discuss the strategy of selling the site with DA approval. An alternate strategy could be to examine the “optioning up” of the property to a developer which could maximise the sale price in today’s market.
Want more?