Q: Our neighbor sold his house to a commercial enterprise bordering on his property. He sold it after they approached him with an unsolicited offer. The neighbor was told that the business wants to remodel / rebuild the property and wants a “green space” between them and the surrounding area.
Now they also contacted us. Do you have any do’s and don’ts, recommendations on how to deal with any proposal made? How to calculate the cost of real estate that will undergo a zoning change from residential to commercial?
A: First, contact your former neighbor to find out how much he received for his property. This information may be published online (check with your county’s registrar), but in some regions it may take some time for the sale price of a home to be published, and in some cases it will not be publicly available.
Once you know the price your neighbor received for his property, you have a starting point to determine how much your home is worth. This may not be an accurate comparison, as one hotel may have amenities that the other does not, but it is useful. And if you can find out what the commercial company actually means for this property (check with your local building department to find out what could be built if all the properties together were commercial zones), it will help you understand. how much your property benefits the homeowner or commercial developer.
Get as much information as possible about the value of the property. Check the websites and also talk to a few local real estate agents (both residential and commercial) and see what happens in terms of valuation. When interviewing these agents, ask them to give you an idea of what a property valuation in your area looks like, at what price they think your home should be listed, and how much they think you will be offered. Calling these agents does not oblige you to hire them. You just talk to them, get to know them to see if you can work together, and gauge their understanding of the local market conditions.
Once the commercial company makes you an offer, you can decide whether you want to accept their offer, discuss it based on what you have learned, or simply say, “No thanks.” Without information, you cannot make an informed decision.
When it comes to zoning changes, moving real estate from residential to commercial can affect the price. You should be aware that such changes usually occur with large packages or several packages at once. For example, if you have farmland and want to build a shopping center on it, if you have enough farm plots grouped together, you should contact the government redevelopment agency to apply for a land-use change. Usually, in such a situation, the value of land grows exponentially.
But in your circumstances, you are one of many who could be involved in the zoning change. The developer will spend a lot of time, money and effort collecting plots and working with government officials to change the zoning of the property. We don’t think you can value your property as if it had already been modified, but a developer can give you a premium just to bring all the land together for whatever project they design.
The last thing to keep in mind is what happens if you don’t sell and all your neighbors sell. You can get a small plot completely surrounded by commercial buildings. If this happens, your value could drop, as there are likely to be few, if any, people willing to buy your property.
Contact Elijs Glink and Samuel J. Tamkin through her website ThinkGlink.com.