Due date of the purchase price, no development yet

Hello everyone,

we would like to buy a plot of land in a new development area.
The legal requirements will soon be established by the development plan.
The contracts are then to be concluded.
The costs for the development are included in the purchase price. The development is expected to be completed in spring 2021.

However, the seller would like to conclude the purchase contract now and have the purchase price approximately 8 weeks later.

Is this common? After all, we cannot even use the plot yet.

Best regards

What does usual mean here? If it is a seller's market and the applicants are lining up, the seller couldn't care less what is usual or not..."Next please."

Perhaps an alternative would be to deduct the assumed development costs from the purchase price and to designate the land in the purchase contract as "Included in the development plan but not yet developed at the time of purchase, development at the buyer's expense."

I don't see a big problem now either. If the contract contains the clause that you are buying in a "developed" residential area, or the seller commits to developing it, it should be safe. For us, it is also currently a gradual transition. The start of development was a few days ago and will last until autumn. However, we already have the draft contract and have finalized the negotiations. The notary appointment will be at the beginning of August. The contract contains "suspensive conditions," which also include the development obligation.

The costs for the development are included in the purchase price. The development is expected to be completed in spring 2021. However, the seller wants to conclude the purchase contract now and receive the purchase price about 8 weeks later. Is that usual? After all, we cannot use the property yet.

Whether you can use it immediately does not matter here. However, as the new owner, you will also be the party liable to pay the development costs to the municipality. Therefore, it should be ensured that the seller keeps his promise. Whether through a trust account or a retention, you should seek advice on that. But I would prefer to completely exclude the current owner (seller) from this and only include his guarantee in the contract that the development will be completed by [XY] (or that he will be willing to reverse the transaction). If he effectively sells it to you as "developed," you will just also pay real estate transfer tax on the development costs; I don't see an advantage for you in that. But in the sense of @Scout’s hint at the "seller's market," you will probably have to account for opportunity costs if the seller only agrees to the deal under those conditions.

To eliminate the development contributions permanently before they arise, a buyout agreement is advisable (§ 133 para. 3 sentence 5 Building Code). Then one can be sure that nothing more can come up there.