Indianapolis, IN asked in Contracts and Real Estate Law for Colorado

Q: Buyer can't see land because of COVID-19? A Right of First Refusal or Option to purchase best for seller?

I have land for sale in Colorado and a very interested buyer from Oklahoma. They have seen a video of the property but they can't travel to see it themselves until May or June because of COVID-19. What is the best agreement to make to sell the property and accommodate them? A Right of First Refusal or an Option to Purchase?

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2 Lawyer Answers
James Alan Greer
James Alan Greer
Answered
  • Boulder, CO
  • Licensed in Colorado

A: Dear Colorado Land Sale Client: I would recommend the following for this transaction: (1) an Option To Purchase for (2) duration of X months (3 months, perhaps ?), with (3) nominal consideration (1% of the sales price, perhaps ?) which will be credited back to the Buyer upon closing. If the Buyer exercises within the duration/cut-off then you'll need a standard Land Sale Contract and associated Warranty Deed. You can expect an experienced attorney should be able to offer you a Fixed Fee for the Option To Purchase (me included in that "experienced attorney" category). JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate matters for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party. 303.818.8422

1 user found this answer helpful

Donald C Eby
Donald C Eby
Answered
  • Castle Rock, CO
  • Licensed in Colorado

A: Why don't you just put the property under contract with a closing date in June and an option to terminate after inspection?

An option does not obligate them to buy, but it does obligate you to sell to them, i.e. you can't sell to anyone else in the mean time. I don't see this as an advantage to you, unless you are hoping to get a large non-refundable option fee.

First right of refusal, simply obligates you to provide the Okies and right to step into any deal that you may put together in the future. I'm not sure how this is good for you?

Seems like you and Buyer should negotiate terms that are acceptable to both and get and agreement on paper.

Good Luck!

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