Every now and then, we meet someone who says, “A developer knocked on my door and wants to buy my house.” It happened 6 months ago. And immediately, the questions start to form.

• Should I sell?
• How much is my house worth?
• Am I sitting on a gold mine?

The answer to all of these questions could be “yes,”, but it’s complicated. It’s a subject that deserves more scrutiny. In this post, we’ll dive into all of the nuances that make your house attractive to developers, and what your next steps might be.

Planning to sell your home in Simcoe County? The Insider’s Guide To Selling is a must-have resource, and it’s free! 

More Than “Just a House”

One of the biggest misconceptions many homeowners have is believing their property’s value is based mostly on the house sitting on it. Many times that’s true. Sometimes the real value is in what the land could become, and those are two very different things.

A home on 5 acres beside an established subdivision isn’t necessarily worth what the neighbouring homes are selling for. It might be worth considerably more, or it might not. The difference often has very little to do with the house itself and everything to do with planning and this is where things can become very interesting indeed.

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Understanding how real estate works can help you decide when and if to sell to a developer – or anyone else. You’ll find plenty of local insight in the posts below:

• A History of Barrie Real Estate: The Changes We’ve Seen
• What Do the Seasons Mean for the Barrie Real Estate Market?
• The Types of Homes You Find in Barrie

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Your Municipality Has a Plan. How Does Your House Fit In?

Every municipality has an Official Plan that helps shape where future growth is expected. They identify settlement boundaries, intensification areas, future growth corridors, employment lands and other areas that may eventually change over time and much of this information is available online.

You can usually begin by looking at your property’s current zoning through municipal or Simcoe County mapping systems that are online. Then compare that with your municipality’s Official Plan online to see whether your property falls within an area identified for future growth.

As part of helping buyers buy homes, we often review these planning documents. Most of the time, we’re helping buyers avoid surprises, like discovering a subdivision, commercial plaza or major roadway is planned behind what today appears to be a quiet country property. Sometimes we smell opportunity and check it out.

The planning process is public. Most people simply don’t know it’s there and here’s where things become interesting.

Immediate Opportunity or Mere Speculation?

Imagine two nearly identical country properties sitting side by side. One falls within an area identified for future residential growth. The other doesn’t. Today, they may have very similar market values. Ten years from now, they could be very different.

We looked at a 90+ acre property last year that bordered a newly finished subdivision. At first, it seemed obvious that the next phase of development would naturally continue onto this property. After all, it was roughly the same size as the subdivision that had just been completed.

But when we reviewed the municipality’s Official Plan, we discovered the land had not been identified as a future growth area. That meant the owner would likely have to wait until the next Official Plan review, which would potentially be over ten years away, before the property could even be considered for that type of development. And that’s just to be considered.

Suddenly, what looked like an immediate development opportunity became a long term speculation project. In development, time is money, and in this case that timeline had a significant impact on the property’s value.

Assessing Future Potential

Developers rarely buy based on what the property is today. They buy based on what they can make it become tomorrow.

That future value depends on many things.

• Current zoning.
• Official Plan designations.
• Access to municipal services.
• Road frontage.
• Environmental constraints.
• Engineering.
• Council priorities.
• Market demand.
• Neighbouring development.

And again, perhaps most importantly, time.

Just because a property makes sense for future development doesn’t mean approvals are around the corner. In some municipalities, the next major Official Plan review may still be years away. If a developer believes they may need to wait five, ten or even fifteen years before being able to get any planning approvals, that waiting period becomes part of the property’s value.

Time does have a price.

A Developer Made an Offer. Now What?

On the other hand, if your property is already located within a designated growth area where municipal planning supports future development, the conversation changes big time. This is often where values can increase dramatically because you’re no longer selling simply a home but you’re selling future development potential.

Still, that doesn’t mean you should immediately accept the first offer that arrives in your mailbox. No.

Developers are experts at evaluating land. They understand planning policy, engineering, servicing, carrying costs, financing, timelines and risk. Most homeowners never encounter this situation.

That’s why knowledge comes first.

• Sometimes the best decision is to sell.
• Sometimes it’s to wait.
• Sometimes it’s to negotiate different terms.

We’ve even helped clients who were selling homes first explore opportunities where they retained a couple building lots as part of the overall sale, creating additional long term value for their family. Every property is different.

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Do you want more tips on getting the best results when selling your house? The posts below can help:

• A Complete Guide to Selling Barrie Real Estate
• 5 Tips For Selling A Waterfront Home
• Should You Stage Your Home Before Selling?

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A Word of Caution

Many homeowners get really excited about getting rezoning or subdivision approvals themselves after hearing how much land values can increase.

While that may sound like a great idea, getting planning approvals is very rarely a simple thing to do. Rezoning applications, environmental studies, traffic reports, engineering, servicing, public consultation meetings, conservation authority input and approvals and subdivision approvals can take years, involve significant expense and require an experienced team of planners, engineers and consultants. There is a reason professional land developers do this every day.

That doesn’t mean you shouldn’t understand your property’s potential. It simply means you shouldn’t have to navigate the process alone.

Seeing What Others Miss

At The Weeks Group, we regularly review planning documents, Official Plans and development activity as part of helping both buyers and sellers make informed decisions. If you’ve ever wondered whether your property has development potential, or if you’ve already been approached by a developer, we’d be happy to help you understand what you have before you decide what to do next.

Sometimes you’re selling a house. Sometimes you’re selling a tomorrow no one else saw.

Knowing the difference can be worth far more than most people realize.

Whatever your next steps may be, our Barrie real estate agents are happy to help. Reach out to us today at 705.305.4174 or email hello@weeksgroup.ca to begin a conversation.