A farming family that owned 150 acres of undeveloped land within the urban boundary of a municipality were constantly approached by realtors and potential buyers of their farm for development purposes. Although they still operated their farm, development was encroaching all around their property and it was becoming difficult to operate within an increasingly urban environment. The family asked us what they could do to sell their property,
Our client’s property was highly sought after, making extensive marketing unnecessary. We therefore developed a tender process whereby we invited certain prequalified developers to submit offers to purchase the property on specific terms identified in our Terms of Reference and property description package, with a deadline for submissions. Our client could review all offers and accept, or negotiate one particular offer if desired. The successful purchaser developer would pay any real estate commission, resulting in considerable savings for our client.
Ultimately, our client chose one of the bids and after negotiation and the Purchaser’s due diligence, the sale closed at almost double the sale price our client had anticipated. The terms were very favourable to our client, including a Vendor Take-Back Mortgage with strict payment and partial discharge provisions for optimal tax treatment; continued occupancy and farming rights; naming rights for the subdivision and streets within the proposed plan; no representations or warranties or cost-sharing obligations, and limited conditions for the developer purchaser. Our client paid no real estate commission. Finally, the Purchaser agreed to resolve issues with the municipality concerning the farmhouse, which had been designated on the municipality’s heritage list, without further reduction of the sale price.