Looking to buy a lot to build a house on. Question… is a feasibility study contingency sort of like a home inspection? As in, we can basically cancel for really any reason if we so choose? Not trying to be shady but just trying to understand how hard it is to end a contract with a feasibility study contingency if sthing pops up that changes how we would be forced to build. Thanks all!

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A feasibility study contingency is somewhat like a home inspection contingency, in that it gives the buyer an opportunity to evaluate the property before being fully committed. However, the specifics depend on the contract terms.

Here’s some advice:
1. Understand the Scope: A feasibility study contingency typically allows the buyer to assess factors like zoning, utilities, soil conditions, and environmental concerns. If any of these factors make the lot unsuitable for building, the buyer can typically terminate the contract.
2. Review the Contract Terms: Some contracts may specify what reasons are acceptable for termination under the contingency. Others may be more open-ended, allowing termination if the buyer is dissatisfied for any reason during the feasibility period. Make sure your contract explicitly allows cancellation if needed.
3. Negotiate Flexibility: When drafting or signing the contract, ensure the feasibility study contingency includes broad language allowing you to cancel for any reason (or no reason) during the feasibility period.
4. Know the Deadlines: Feasibility study contingencies usually have a specific time frame. Be clear on how long you have to complete your assessments and cancel, if necessary.
5. Consult a Real Estate Attorney: To fully protect your interests, have an attorney review the contract and ensure that the feasibility study contingency gives you the flexibility you need.

If something arises during the feasibility study that changes your plans, you should be able to terminate the agreement without penalty, provided the terms are in your favor.

likehelpful

Really helpful. I did chat with an attorney and have the terms set to basically let us cancel without any “proof” of why.

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