Option on Land? - Posted by John S.

Posted by brandoncbsre on September 20, 2008 at 08:49:31:

You need to procure an agreement to purchase this on a first-rights basis. This is done all the time on residential homes. You make your offer with some sort of contingency giving you x number of days clear that contingentcy. The owner is still able to look at other offers, he just has to come to you and give 48-72 hours notice that he has an offer he is willing to take. At that point you either remove your contingency and close according to the terms of the purchase agreement or you lose the deal.

Like I said this is used a lot in residential where a buyer will write on a home they want then ask for 90 days to sell their current home. It can be used for any property though. Instead of selling a home you make your contingency signing a tenant.

A good competant agent or attorney should be able to help you put together paperwork. The seller shouldnt balk because he is only tying his property up for 48-72 hours. If you don’t have the capacity to close he is free to sell to anyone.

The downside is you do not have an equitable interest like you would with an option. Therefore you may or may not be able to market the property as freely.

Go over all of this with an attorney or agent that understands the laws in your area.

Good Luck and let us know how it progresses!

Option on Land? - Posted by John S.

Posted by John S. on September 20, 2008 at 05:49:09:

I would like to purchase land, build a warehouse, and lease to a tenant. The land owner doesn’t want to option the property at all, but has agreed to let me put a “build to suit” sign up and market the property but still wants the opportunity to sell to someone else if they come along.

My question is what are my best options (if any) for this scenario that protects me?

There’s no strike price determined yet if I do find a tenant. The tenant could easily go around me and deal straight with the land owner. All my advertising dollars could be gone if somebody else comes along to purchase the land. Is this even doable or should I just walk away?