Updated: August 2026
Summary
A real estate developer is primarily interested in a property for its development potential: vacant land, a house on a large divisible plot, or an old building in a city centre.
The price offered can be significantly higher than the standard existing-property market price, as it is calculated on the basis of a developer feasibility assessment that takes into account the buildable floor area.
Before any negotiation, it is essential to check the PLU (local urban development plan) and the actual development potential of the plot.
The sale is almost always formalised through a promise of sale subject to conditions precedent (obtaining planning permission, expiry of third-party appeal periods).
The period between signing the promise and completing the sale is often long: generally between 12 and 24 months.
A local real estate advisor can help assess the property's true potential, manage the negotiation and secure each legal stage of the transaction.
You own a plot of land, a house on a large plot or an old building located in an area undergoing densification, and a developer has contacted you or may do so? This type of approach completely changes the situation compared with a conventional sale between private individuals. A developer does not think in terms of “price per square metre of living space”, but in terms of development potential, which can result in an offer far higher than what a traditional buyer would propose. However, this opportunity also comes with a more complex sales process, with long deadlines and conditions precedent that need to be understood before signing anything.
Selling a property to a developer means accepting certain rules: the sale only becomes final once planning permission has been obtained and all third-party appeal periods have expired, which can take several months or even more than a year. In return, the negotiated price takes into account the development value of the property, rather than simply its condition or current living space. Many owners discover that their plot, considered modest on the conventional market, has a very different value in the eyes of a developer who sees the potential for a multi-unit development.
In this article, we explain when a developer may be interested in your property, how the price they offer is calculated, which planning checks should be carried out before any negotiation, how the promise of sale with conditions precedent works, the actual timeframes to anticipate, the points on which you can negotiate effectively, and the risks to keep in mind throughout the transaction.
When Might a Developer Be Interested in Your Property?
A real estate developer is primarily looking for land with strong development potential. Three situations arise most frequently when selling land to a developer or a similar property.
Land with Significant Development Potential
This is the most obvious case: vacant or lightly developed land, located in an area classified as suitable for development under the local planning document, and large enough to accommodate a development of apartments or grouped individual homes. Developers primarily target land close to town centres, public transport or developing areas where demand for new housing remains strong.
A House on a Large Divisible Plot
Many homeowners own a detached house on a plot that is considerably larger than the house itself requires. If planning regulations allow it, this type of plot can be divided to accommodate several new buildings, or even a small apartment development. In this case, the developer is not interested in the house itself, but in the amount of land that could be freed up once the existing building has been demolished or partially retained.
An Old Building in a City Centre
An apartment building, an ageing commercial building or even an urban brownfield site in the heart of a city may also attract developers, particularly for major renovation or demolition-reconstruction projects. These locations are sought after for their proximity to shops and services, a key factor in the future marketing of new homes. If you are considering this type of sale, it may be useful to compare this approach with other strategies, such as selling an apartment building unit by unit rather than selling the entire property to a single developer.
In all three cases, the common factor is simple: the property's value does not depend on its current condition, but on what can potentially be built on it. This is the principle you need to understand before even considering a negotiation.
Understanding the Developer Feasibility Assessment
A Valuation Approach Different from the Existing-Property Market
On the conventional existing-property market, a property is valued according to criteria such as living space, overall condition, location and features. A developer takes a different approach: they prepare a developer feasibility assessment, a forecast calculation that starts with the expected revenue from the sale of the new homes, then deducts all costs (construction, professional fees, taxes, margin and financing costs) to determine how much can be allocated to purchasing the land while keeping the development profitable.
In practical terms, this means that the value assigned to your property can be significantly higher than the price a conventional seller would obtain for the same amount of living space. For example, an old house worth around €250,000 on the traditional market due to its poor condition could be valued much more highly if the land on which it stands allows several new homes to be built. It is the land, rather than the existing building, that accounts for most of the value.
Why the Price Offered Can Vary Significantly from One Developer to Another
As each developer has their own assumptions regarding sales prices, construction costs and target margins, two developers may offer very different prices for the same property. It is therefore advisable to obtain several opinions and compare offers before committing, rather than accepting the first proposal received. A free online property valuation provides a useful initial benchmark for determining the “conventional” value of your property, which can then be compared with the development value suggested by the developer.
Check the PLU and Development Potential Before Negotiating
Before entering into any price discussions, it is essential to check, either yourself or with the help of a professional, the actual development potential of your property. This step will allow you to determine whether the developer's offer is reasonable, insufficient or, on the contrary, particularly advantageous.
Consult the Local Urban Development Plan (PLU)
The municipality's PLU, or equivalent planning document, defines the zoning applicable to your plot: urban, future development, agricultural or natural zone, as well as rules concerning building height, site coverage, setbacks from property boundaries and parking. These rules directly determine how many homes can theoretically be built on your land. This document can generally be consulted at the town hall or on the website of the municipality or intermunicipal authority.
Request a Planning Certificate
To go further, you can request an operational planning certificate, which indicates whether the land can accommodate the proposed project and under what conditions. Although this document is not 100% binding for the future, it provides valuable information before entering into negotiations with a developer.
Do Not Rely Solely on What the Developer Tells You
It is natural for a developer to highlight constraints or, conversely, minimise the actual potential of the land depending on their negotiating interests. This is why it is advisable to have these factors checked by an independent professional before setting your price expectations. A local real estate advisor, working with planning departments, can help you objectively assess the development potential before entering into any serious discussions.
The Promise of Sale and Its Conditions Precedent
Selling to a developer almost never follows the same process as a conventional sale completed in a single step. The process almost always involves a promise of sale, often a unilateral promise of sale, subject to specific conditions precedent.
The Condition Precedent of Obtaining Planning Permission
The most common condition is that the developer obtains planning permission, free from any third-party appeals, that complies with the development they intend to build. In other words, the final sale will only take place if the developer successfully obtains this planning permission under the conditions set out in the contract, such as the number of homes and permitted floor area.
Expiry of Third-Party Appeal Periods
Once planning permission has been granted, it remains displayed at the town hall for a certain period, during which third parties such as neighbours, associations or local authorities may challenge it. Until this period has expired without an appeal, or any appeals have been resolved through withdrawal or dismissal by the court, the planning permission is not considered final.
This expiry of third-party appeal periods is almost always included as a condition precedent in the promise of sale, as no developer will commit to purchasing land based on planning permission that can still be challenged.
Other Possible Conditions Precedent
Depending on the development, other conditions may be added: obtaining financing by the developer, satisfactory soil survey results, absence of restrictive easements, or obtaining additional administrative authorisations such as environmental approval or approval from the Architectes des Bâtiments de France in protected areas.
Each of these conditions must be clearly drafted, with precise deadlines, to prevent them from becoming an indirect way of extending the commitment indefinitely without ever completing the transaction.
Often Long Timeframes: Allow 12 to 24 Months
One of the least-known aspects of this type of sale is its duration. Between signing the promise of sale and signing the final deed of sale at the notary's office, you should generally expect between 12 and 24 months, and sometimes longer depending on the complexity of the planning application, the size of the development or the existence of appeals.
This timeframe is explained by the sequence of stages: assessment of the planning application by the planning authorities, which can take several months; the display and third-party appeal period, which adds several more months; possible legal proceedings if an appeal is filed; and finally, completion of the remaining legal and financial aspects before the final deed is signed.
It is important to take this timeframe into account in your personal plans. If you need to receive the proceeds of the sale quickly, or if you need to move within a limited timeframe, this type of transaction may not be the most suitable solution for your situation, at least without careful planning.
Throughout this period, you remain the legal owner of the property, with all the associated rights and obligations, including maintenance, taxes and insurance, unless otherwise agreed in the promise of sale. It is therefore essential to anticipate what you will do with the property during this waiting period: keep it as it is, rent it temporarily, or negotiate specific occupancy arrangements.
Key Points to Negotiate with a Developer
Once the development potential has been checked and the logic of the developer feasibility assessment understood, several points require particular attention during negotiations.
The Price and How It May Be Revised
The price initially offered may be revised depending on the final planning permission obtained, including the number of homes and authorised floor area. It is important to clarify in the promise of sale whether the price is fixed or whether it varies according to the floor area ultimately authorised, with a precise and transparent calculation mechanism.
Deadlines and Conditions Precedent
Each condition precedent should have a maximum deadline, after which either you or the developer can withdraw from the sale. Without such a limit, you could remain committed indefinitely without any certainty that the transaction will be completed.
It is also useful to negotiate how frequently the developer must keep you informed about the progress of the project.
The Immobilisation Indemnity
In return for your commitment during this period of uncertainty, the developer generally pays an immobilisation indemnity, which may be retained by the seller if the sale fails for a reason not covered by a condition precedent in the contract.
The amount of this indemnity and the conditions under which it is returned or retained are important points of negotiation that should be reviewed by a professional before signing.
Withdrawal and Occupancy Arrangements
It is also important to specify the arrangements if the property is occupied, either by you or by a tenant: the expected date on which the property must be vacated, any compensation payable in the event of a delay, and the conditions under which the developer may access the land for preliminary studies such as soil surveys or topographical surveys.
During this phase, it may be useful to browse Capifrance property listings to compare local asking prices for similar properties and objectively assess your negotiating position.
Risks to Anticipate
Selling to a developer offers genuine financial advantages, but it also involves specific risks that should be understood before making a commitment.
Failure to Obtain Planning Permission
The main risk is that the developer does not obtain the expected planning permission, or obtains permission with reduced characteristics, such as fewer homes or a smaller floor area, making the development less attractive to them.
In this case, if the condition precedent has not been satisfied, the sale may be cancelled without compensation for the seller, unless otherwise provided for in the agreement.
Third-Party Appeals Against Planning Permission
Even when planning permission has been granted, an appeal filed by a neighbour or association can significantly extend the timeframe or even lead to the planning permission being cancelled by the administrative court.
This is precisely why the condition requiring the expiry of third-party appeal periods is systematically included in promises of sale to developers.
Dependence on a Single Potential Buyer
Unlike a conventional sale, where several buyers may quickly make offers, selling to a developer often ties up the property for a long period with a single operator. If the transaction ultimately fails, you will have to restart the marketing process, with the resulting loss of time.
Risk of Underestimating the Development Potential
Finally, a less obvious but very real risk is accepting an insufficient offer because you lack information about the true potential of your land. This is why checking the PLU beforehand and obtaining professional support remain essential steps before signing anything, whether for a simple plot of land or as part of a broader commercial property investment involving land with development potential.
Contact a Capifrance Real Estate Advisor
Selling a property to a developer combines issues relating to land valuation, planning regulations and the legal drafting of the promise of sale, all areas where professional support can make a genuine difference.
A local Capifrance real estate advisor understands the land market in your area, can objectively assess your property's development potential before any negotiation, help you compare several offers from developers, and support you on the key points of the promise of sale, including conditions precedent, deadlines and the immobilisation indemnity.
They can therefore provide valuable support in securing a transaction that often takes several months, or even several years.
Conclusion
A developer is interested in your property for its development potential, whether it is vacant land, a house on a large divisible plot, or a well-located old building.
The price offered is based on a developer feasibility assessment, which is often more favourable than the conventional existing-property market price because it values the land rather than the condition of the existing building.
Checking the PLU and the actual development potential before any negotiation allows you to enter discussions from a stronger position.
The sale is completed through a promise of sale subject to conditions precedent, particularly obtaining planning permission and the expiry of third-party appeal periods.
Timeframes are often long, generally between 12 and 24 months, which must be factored into your personal plans.
The price, deadlines attached to the conditions precedent and the immobilisation indemnity are the main points of negotiation that should be secured in writing.
Seeking support from a local professional remains the best way to approach this type of transaction with confidence and ensure that your property is valued fairly.
If you are considering selling land, a house on a large plot or a building with significant development potential, you can consult the dedicated page on selling your land with Capifrance and seek professional advice before entering into any negotiations with a developer.
FAQ
Does a Developer Always Pay More Than a Private Buyer?
Not necessarily, but this is often the case when the property has genuine untapped development potential. The price depends on the developer feasibility assessment, which itself depends on the number of homes that can be built, local construction costs and the developer's target margin. Without valuable development potential, the difference compared with the conventional market may be small or even non-existent.
What Happens If Planning Permission Is Refused?
If obtaining planning permission is a condition precedent of the promise of sale, refusal generally results in the sale becoming void, without compensation for the seller, unless otherwise agreed in the contract. The property is then fully released from the commitment.
Can I Stay in My Home During the Process?
Yes, this is entirely possible and can be negotiated in the promise of sale. It is common to provide for a date on which the property must be vacated that coincides with the planning permission becoming final, with precise arrangements in the event of a delay by either party.
What Exactly Is the Immobilisation Indemnity?
It is a sum paid by the developer when the promise of sale is signed, in return for the exclusivity and commitment granted by the seller during the period in which the application is being processed.
Depending on the contractual provisions, it may be retained by the seller if the sale fails for a reason attributable to the developer, or returned if a legitimate condition precedent is not satisfied.
How Can I Find Out Whether My Land Is Actually Buildable?
The first step is to consult your municipality's PLU to determine the zoning and rules applicable to your plot. You can then request an operational planning certificate from the town hall to obtain an official response regarding the feasibility of a specific project.
Should I Negotiate with Several Developers at the Same Time?
This can be a useful strategy for objectively assessing the value of your property and avoiding committing to an undervalued offer. Comparing several proposals, with the help of a professional, allows you to better understand the assumptions used by each developer in their feasibility assessment.
Is It Risky to Sign a Promise of Sale with a Developer?
The main risk is that your property may be tied up for a long period without any absolute certainty that the sale will be completed, particularly if planning permission is refused or a third party files an appeal. However, this risk can be limited by negotiating clear conditions precedent, defined deadlines and a balanced immobilisation indemnity.
How Long Does a Sale to a Developer Take on Average?
It generally takes between 12 and 24 months from signing the promise of sale to signing the final deed, due to the time required to process the planning application and for the third-party appeal period to expire. This timeframe may be shorter or longer depending on the complexity of the development and any potential legal disputes.
Author :
Frédéric Rémy – Director of Commercial Performance
A real estate professional for several years within the Capifrance network, I would like to share with you some essential advice to help you succeed in your real estate project with the support of our advisors.
