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Use Contingencies To Make An Offer

By Tom Brickman on June 19, 2012

In my 37 years of experience as an Alabama real estate broker, appraiser, and forester, I’ve learned that there are no perfect properties or perfect deals.  So, if you’re ready to make an offer on some rural land but the property has a few issues that you’re concerned about, my advice is this: don’t hesitate and lose the opportunity – make an offer but use “contingencies” to deal with the issues.

A contingency says, “I’ll buy the property only IF certain events happen prior to closing”.  For example, if you must borrow money to close the purchase, make getting a loan commitment a condition for purchase.  If a neighbor’s driveway is over a property line, require the seller to resolve the issue to your specifications prior to closing.  I’ve seen solutions that include moving a driveway, obtaining an affidavit from the neighbor regarding terms of use, surrendering ¼ acre and lower the price, etc.

The point is, many problems have good answers.  So, don’t let resolvable issues keep you from moving forward with an offer on a good property.  With well-written contingencies, you’ll be first in line to buy the property.  Then, either the issues will be resolved to your satisfaction or you’ll get your down payment back.

2 thoughts on “Use Contingencies To Make An Offer

  1. I have 40 acres land which is landlocked. We have no access to the property beside through power line opening. We own this land for 10 years and our plan is to move there in a few years and build a house. Our Neighbor who has property between us and the road is selling their 42 acres right now and will not divide nor offer portion for roadway. I can’t afford to buy 42 acres but maybe less than 10 acres all I need to access my land. Please advise how we can resolve this in getting the needed access to road and utilities.
    Thank you,
    Alfred

    • Alfred,

      You’re in a tough spot. And, one that is fairly common in rural Alabama.

      If you can’t afford to buy the 42 acres, here are some options you might consider:
      1. Borrow the money to buy the 42 acres. But just for a very short period of time. Then, carve off the piece you need for access and re-sell the rest to pay off all/part of the loan.
      2. Negotiate with your neighbor for an easement instead of buying the land. You want an easement that is a “right of ingress and egress with utilities”. 30′ wide should be enough. It will cost you some money to pay the landowner for the easement and to get a lawyer to close it and a surveyor to measure it. But it will be less than paying for the land.
      3. Wait for the new owner to arrive and then try to resolve it with them.

      Alabama has a law that says you can’t “landlock” your neighbor. That is, deny them physical access. But you have not been denied physical access. You just lack water and power.

      The bottom line is that unless there is an alternative way in to your property, you can’t run power and water across a neighbors land without their blessing. And they don’t have to give you that.

      Good luck

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