Here is what you need to think about from a developers mindset.
How much would two new homes go for? Homes that would fit per zoning requirements.
Demo costs for house on there now?
How much would improvements cost?
Carrying Costs and closing costs (including real estate commissions if the developer uses a real estate company)
Cost to build each unit?
Calculate all those things and they will be able to see how much profit is in the project. You think the market is saturated with homes, try taking a look at lots on the market. Here in philadelphia and surrounding market, there are enough land listings to last 5 years in terms of buyers with the current sales stats. talk about saturation.
Here is another option for you. Not saying it is the best option but what about going into a joint venture with a builder. You front the land, they demo, improve it and build. You walk with a preset amount from the sale. Doing it this way will most likely net you much more in the long run as they dont need to finance the purchase of the lot which can be a pain to get from a bank nowadays.
I'm afraid a deposti will not cover any expenses you may incur in your attempt to purchase another property, should the buyer of your home be refused a mortgage, for legitimate reasons...UNLESS the prospective buyer of your home is willing to waive the "mortgage contingency" clause, agreeing that whether or not they get approved by a bank, they will make the purchase anyway. This is unlikely and so you should not count on having any expenses you've incurred reimbursed. I would imagine, also, that you may need the money from your sale to make your next purchase and if that is the case, and you are also applying for a mortgage, it is unlikely that you will be approved either....unless you can do so without the monies from the sale of your existing home. If you enter into a contract to purchase AND you do need a mortgage or the cash from your current home's sale, then please do not agree to purchase the next home without any contingencies.
If in fact we are in a declining market -sooner rather than later. Proper pricing and marketing is the main concern when selling a home in this market. If you are interested in discussing this further give me a call.... more