Hello everyone,
I would like to tap into the collective knowledge here because I’m currently feeling a bit “lost” or even stressed.
I am part of an inheritance group with a total of 3 parties involved. The issue concerns a plot of land measuring 1000 sqm (approximately 10,764 sq ft) in Baden-Württemberg. The general value for farmland is around €10 per sqm (approximately $11 per 10.76 sq ft), and the official standard value when classified as building land is about €700 per sqm (approximately $755 per 10.76 sq ft).
Anyway, as it often happens, the land is not yet classified as building land, but it borders directly on a residential area. After consulting with the city authorities, it appears that the land will not be reclassified as building land anytime soon, partly because of its small size and the lack of interest to initiate any change.
All of us in the group still want to sell the property and, based on discussions with a real estate agent, we expect a price in the range of about €300–400 per sqm (approximately $323–431 per 10.76 sq ft). (We will not accept less.)
Now the agent has drawn up a contract for us. Unfortunately, I’m starting to have second thoughts. Do you see any potential issues in the contract? Of course, we want to pay the agent only when a contract is signed and the buyers pay more than €300,000 (approximately $323,000). If there are no offers or only lower ones, we don’t want to sell.
What do you think about the agent’s contract? Is it easy to terminate it after one year, and what happens if we reject offers for whatever reason?
Here is an excerpt from the contract:
See attachment
I would like to tap into the collective knowledge here because I’m currently feeling a bit “lost” or even stressed.
I am part of an inheritance group with a total of 3 parties involved. The issue concerns a plot of land measuring 1000 sqm (approximately 10,764 sq ft) in Baden-Württemberg. The general value for farmland is around €10 per sqm (approximately $11 per 10.76 sq ft), and the official standard value when classified as building land is about €700 per sqm (approximately $755 per 10.76 sq ft).
Anyway, as it often happens, the land is not yet classified as building land, but it borders directly on a residential area. After consulting with the city authorities, it appears that the land will not be reclassified as building land anytime soon, partly because of its small size and the lack of interest to initiate any change.
All of us in the group still want to sell the property and, based on discussions with a real estate agent, we expect a price in the range of about €300–400 per sqm (approximately $323–431 per 10.76 sq ft). (We will not accept less.)
Now the agent has drawn up a contract for us. Unfortunately, I’m starting to have second thoughts. Do you see any potential issues in the contract? Of course, we want to pay the agent only when a contract is signed and the buyers pay more than €300,000 (approximately $323,000). If there are no offers or only lower ones, we don’t want to sell.
What do you think about the agent’s contract? Is it easy to terminate it after one year, and what happens if we reject offers for whatever reason?
Here is an excerpt from the contract:
See attachment
K
karl.jonas25 Nov 2021 10:41I was recently in exactly this situation as a buyer:
* Purchase of farmland
* Seller had exclusively appointed a real estate agent (whom I never contacted)
* Seller believed the land would eventually be developed (and had corresponding price expectations)
The purchase contract has now been completed; the solution was:
* The agent did not receive a commission (nor did they request one), as they were not involved in this transaction (of course, I am not aware of the agent agreement)
* The purchase was made at the price of farmland (without any markup). The contract includes a clause stating that the seller will receive a (substantial) additional payment if I use the property as building land within the next ten years (i.e., if I develop or sell it)
* Purchase of farmland
* Seller had exclusively appointed a real estate agent (whom I never contacted)
* Seller believed the land would eventually be developed (and had corresponding price expectations)
The purchase contract has now been completed; the solution was:
* The agent did not receive a commission (nor did they request one), as they were not involved in this transaction (of course, I am not aware of the agent agreement)
* The purchase was made at the price of farmland (without any markup). The contract includes a clause stating that the seller will receive a (substantial) additional payment if I use the property as building land within the next ten years (i.e., if I develop or sell it)
apokolok schrieb:
Well, that wasn’t really the question here, nor is it our problem.
If the land is designated as potential building land and located in a sought-after area in Baden-Württemberg, someone will definitely bite.Amen!
If you knew how many properties around the Stuttgart metropolitan area have already been sold by developers and then reclassified as building land just two months later, you would see things differently.
B
Benutzer20025 Nov 2021 10:54Roger12 schrieb:
If you knew how many plots have already been sold by developers in the suburbs around Stuttgart and then turned into building land just two months later, you would talk about it differently. Wow, in Stuttgart does farmland really turn into building land within two months? Elsewhere, this process takes years (changing the land use plan, drafting a development plan, passing statutory resolutions, involving authorities/agencies/stakeholders, etc.).
If you truly understood what it takes to convert actual farmland into building land, you would speak differently. Even in Stuttgart’s suburban area, rules must be followed – and they don’t just take two months.
The preparation of a new development plan alone normally takes between two and three years. Just so you know.
Roger12 schrieb:
was sold to a developerYou actually mention the key point yourself. With your 1000m² (10,764 sq ft) as a private individual, there’s no chance of getting building land within 2 months 😉
See the rest of my predecessor’s post 🙂
B
Benutzer20025 Nov 2021 10:56apokolok schrieb:
If that is in any way land designated for potential buildingThis should be evident from the land use plan. You can simply check it. However, the original poster writes "arable land." And who will cover the costs for converting it into building land plus the development costs is still uncertain. That can add up to quite a bit...