Posted by John Behle on June 20, 2000 at 12:43:43:
It’s done commonly every day throughout the country. Many times builders and developers will make their purchase and deposit (or Earnest Money) contingent upon approval as a subdivision, condo, etc. That takes the risk away from the buyer, but sometimes the seller won’t go for it and will insist on a non-refundable deposit.
When I started in real estate 24 years ago it was in land development and new homes. It was common then and is now. When prices were going up rapidly buyers were also making some excellent profits through what we termed “Earnest Money Options”. A small amount of Earnest Money - as little as $100 would tie up a property as it was being built. Upon completion many months later it was usually worth thousands more than they agreed to pay.