Developer put in an offer on land, how to determine if reasonable?

[Brian Plath]

Hi all.

A family member recently received an offer on some farm land that is in one of the nicer suburbs in the Twin Cities. The city is working with a time table of ~5 years until scheduled residential development.

A developer recently made an offer and I was wondering who would be the best resource for determining whether or not the offer is reasonable. Would he seek out a real estate agent that specializes in land deals?

We've tried looking for good comp's on county record sites but there haven't been many recently.

[Joel Owens]

Sounds like the developer is only interesting in paying cash now for a discount.

The purchase option I do not really see what benefit you would have to accepting that. You do not want to tie up your property for 4 years. Anything could happen with that developer in that time.

Put in a "right to continue marketing" kick out clause where you can hold the developer to the option price but if something better comes along sooner or when year 4 hits they have to match or you can sell to someone else.

If they demand to be exclusive to do a contract make them put up huge non-refundable option money that you get TODAY but will be applied off the purchase price at closing.

Really you need a real estate attorney to draft the proper forms. The developers attorney will likely take you to the cleaners if you let them draft everything.

Hope it helps.

No legal advice.