Submitting offers subject to "satisfactory feasibility" for development

[FrankGrimes]

Hi team,

This is somewhat related to
http://www.somersoft.com/forums/showthread.php?t=56057

I'm looking at purchasing a small development site in the near future. I was wondering whether it is possible to submit an offer subject a satisfactory feasibility study to be performed by a qualified individual (architect, town planner etc)? Whereby if the feasibility fails and development not possible due to either financial viability or otherwise I can terminate the offer?

Has anyone used this before and what was the wording in the contract?

Thanks,

Grimey

 

[Propertunity]

Grimey, in these circumstances it is more usual to do an 'option to purchase' where you pay a premium of $x which gives you the right but not the obligation to proceed with the purchase after feasibility / DA approval etc. If you pull out then you lose the premium to the vendor for his trouble / taking it off the market for you for a period.

 

[FrankGrimes]

Thanks for the reply. I thought that was an option you would likely use for a larger development, where the DA could be difficult to attain and the vender is aware their block is a development site. I was more looking to get some time to do a proper feasibility (by town planner or architect) before the contract goes unconditional. I want to avoid purchasing land to later find out it isn't developable.

But I don't want to keep paying vendors a premium for every feasibility that fails. What sort of premium are you talking for a duplex/triplex?

Cheers,

Grimey

 

[Propertunity]

But I don't want to keep paying vendors a premium for every feasibility that fails.

And the flip side of this is that vendors do not want there property 'off-the-market' during a peak selling time if the contract may fall over.

What sort of premium are you talking for a duplex/triplex?

Anything you can agree on from 1 cent to $5K or $10K or more.

 

[Dazz]

I'm looking at purchasing a small development site in the near future. I was wondering whether it is possible to submit an offer subject a satisfactory feasibility study to be performed by a qualified individual (architect, town planner etc)? Whereby if the feasibility fails and development not possible due to either financial viability or otherwise I can terminate the offer?

Don't submit the offer until you have checked it out first.

If you are worried about spending money doing feas. studies, well, you are either in the wrong game or must be willing to chance your arm.

Looks like you want all of the options and rights available to you for no skin in the game. Any Vendor that decides to dance with you on that basis needs his / her head read.