A couple of weeks ago we exchanged on a property on Ealing Rd, Alperton, opposite Sainsbury’s. We bought a pub with some land around it, with the aim of looking at this as a site value which we can get planning for residential units.
Since the purchase I have come across 3 people who were bidding on the site, I was told there were no less than 30 bidders for this site. One of the failed bidders wanted to speak to us and managed to get connected. He apparently owned the site next door, that’s what he claimed anyhow. And he was either looking to do a joint venture or purchase the site from us outright.
On the phone he suggested we paid too much, he said we would not get planning for anywhere near the number of units we were hoping for. This means both our architect and planning consultant were wrong.
Its human nature to down play what you missed out on or what you are not part of, people do it for everything.
However, the tone of the conversation annoyed me a little, and so I decided to dig a little deeper, he seemed very blasé about the whole project. Someone who owned a site with this potential would not be so casual, when speaking to someone who owns the site next to you.
You can tell a lot from a property address including the purchase price. The land registry reveals the ownership details, how long they have owned the property, who’s got a mortgage on it and so forth. Perhaps a little too much information than should be allowed to the casual snooper. Many people are cagey about what they paid for a property, but the information will be made publicly available within a few months of purchase.
When we investigated the land registry documents it transpired he didn’t quite own the site, the names did not match. Though his name was not on the land registry, there was a possibility he could have some control on the property. We thought he may have an option agreement, which is an agreement to purchase the site sometime in the future at a predefined price, it’s a binding contract which the seller cannot get out of. Or he may have exchanged on it, this would not show up on the land registry unless it had been specifically noted. So there was a possibility he still may be able to control the deal without actually owning the site.
We had to dig down another layer. Property at times requires almost detective work.
We tracked down the owner’s location and paid them a visit in person.
They purchased the property as a commercial investment, when they had a tenant in the building. This property was purchased as a commercial investment by them back when they had a tenant in the building. The owner who were a couple were oblivious to the potential size of the site value, now that the tenant vacated, it was just something to get rid of at the best possible price.
There was an offer on the building by the person who claimed to own it.
He had simply agreed to purchase it, and note this does not mean he had purchased it. Out bidding a property under offer doesn’t cost anything nor is there any obligation by either party. This means the seller can accept a higher offer and the buyer can choose not to proceed. This is the case up till the point of exchange. When the transaction becomes contractual.
He was obviously thinking whilst he was in the process of purchasing this one that he could “grab” the next door as well. Buying them both would mean 1+1 is equal to 3. Shouting too loudly whilst doing a deal could invite trouble. Especially when you are making claims which are not true. The property was under offer to him, but this is very different to saying that they own it already.
When we met the current owners we told them two things we would increase the offer and execute the deal very quickly, both of which were music to their ears. We mentioned we did not want to get into a bidding situation and if they tried to raise the price by going to the other party the deal would be off. We can move as fast as their lawyers could get the paper work over to ours.
This is an important piece of the puzzle when it comes to doing the development, we were looking at a JV opportunity at best, never realised we could own the site out right.
The former bidder or ‘owner’ as he liked to call himself was understandably disturbed at the new turn of events, not only did he lose in the bidding round, but he also lost a significant part of the puzzle which he was on track to buy, until we pulled the rug from underneath his feet.
This is still not the full part of the puzzle as there are other bits of land around this development where we could still do a joint venture with the owners or purchase outright to enhance the ultimate development. We are doing our ground work in this regard, simultaneously we are also exploring our development options on the two sites we own as well. This is what we have for sure and it always pays to negotiate from a position of strength.
This is a ‘fresh’ deal and is open for investment, if you like the sound of this you might be able to get a piece of this deal. Call our office to find out more.