The Purchase Agreement & Contingencies

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Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.

Here's one that matters more than its name lets on — The Purchase Agreement & Contingencies. Bottom line — write this one down: Tie closing to your approvals — control the land, get it entitled, then buy. Do this right and it shows up in your work, your reputation, and your paycheck.

The purchase and sale agreement (PSA) is the contract that controls how you buy the land. The most important parts for a developer are the contingencies — your escape hatches.

Key terms

• Price & deposit (earnest money) — what you pay and what you put at risk up front.
• Due diligence / feasibility period — a window (often 30–120 days) to investigate the property and walk away for any reason with your deposit back.
• Contingencies — conditions that must be met or you can cancel: financing, entitlements/rezoning, clean environmental, acceptable title and survey, soils.
• Closing date — when you actually take ownership.

Why contingencies matter

A developer rarely closes on land before knowing it can be built. Smart deals tie closing to getting your approvals first (an "entitlement contingency"): you control the land, do the rezoning, and only close once the project is approved.

Practical moves

• Negotiate the longest feasibility period you reasonably can.
• Ask for extensions (often for an added, sometimes non-refundable, deposit).
• Make sure deposits are refundable during due diligence.

Going Deeper (Intermediate)

The purchase and sale agreement (PSA) with contingencies is what protects a developer: feasibility/DD, financing, entitlement, and title contingencies let you walk and recover your deposit if the deal doesn't work out.

Advanced / Pro-Level

Structure the PSA around your real risks:

• A feasibility/inspection period to do DD with a refundable deposit.
• An entitlement contingency — close only after the rezoning/approvals are in hand (so you don't own un-entitled land you can't use).
• Financing and title contingencies, plus extension options.
• Balance against the seller's desire for certainty (hard/non-refundable money). Sophisticated deals use option or rolling-takedown structures to control land cheaply while de-risking. The art is enough time to remove risk before your money goes hard.

Practice Challenge

Why might a developer insist on an entitlement contingency (close only after rezoning) rather than buying first and rezoning after? (Answer: rezoning is discretionary and can be denied — buying first means you could own land you can't develop as planned; the contingency lets you control the land while pursuing approvals and walk if they fail, shifting that entitlement risk off your balance sheet.)

In Practice

A buyer closes on land with no entitlement contingency, then can't get it rezoned — stuck with unbuildable dirt. Tie closing to your approvals so you control the risk.

Common Mistakes to Avoid

• No feasibility or entitlement contingency
• Closing before approvals are secured
• Non-refundable deposits during diligence

Takeaway: Tie closing to your approvals — control the land, get it entitled, then buy.

Educational content — not legal, engineering, or financial advice. Requirements vary by jurisdiction; always confirm with the local authority and your professional team.