Due diligence in property development involves many steps. When done correctly, buyers and sellers can reduce the risk involved in land development and increase the rewards. The process begins before a property developer signs the contract.
What a Real Estate Attorney Does for Property Developers Considering Land Purchase
If the property developer is considering land near Palm Springs, a Palm Springs real estate attorney can help. A developer’s best choice is to hire a real estate attorney who has worked with developers and land purchase contracts.
The real estate attorney can negotiate all required terms and explain them clearly. When a developer and land seller understand what is expected, they can reduce revisions, amendments, and delays.
30 to 60 days is the minimum due diligence time period, but 120 days or more is common, especially with multiple acquisitions, parcels requiring re-zoning, or parcels depending on permit approvals.
Factors to Consider
Sellers and developers should consider factors about unimproved lands.
- If the seller has a clear title to the property
- If the land encroaches on adjoining property, or vice versa
- Zoning and environmental regulations
- Access to utilities
- Road availability
- If the property is in danger in case of flooding or fire
The property developer and the seller may also hire attorneys, surveyors, engineers, environmental experts, and zoning and land use specialists to better understand the raw land and its risks and potential.
While owners cannot legally sell the land to another party, they can have back-up offers. They cannot reveal the terms of either the primary offer to the back-up buyer, or vice versa.