Cons of allowing Twelve Month Escrow to developer.
A developer is making an offer on a vacant lot I own with the stipulation of a 12 Month Escrow.  The developer is looking to rezone and potentially assign.

The down payment is 10% nonrefundable after 3 months.

Anyone have experience with such a long Escrow period?

Please share your thoughts and tips. Thanks!
[{"id": "hi7pddv", "text": "It can take that long depending on what they\u2019re trying to do and how \u201cfriendly\u201d/responsive the city is. They have to sink a bit of money to present a plan to city, which has to meet certain guidelines that aren\u2019t always clear, if they get approved it gets put on the docket for the council to get a final approval, and that can far longer that necessary. The developer likely isn\u2019t going to build a spec building (unless it\u2019s sfh or multi) so they\u2019ll have to find a tenant/user who will have their own requirements. \n\nLong story short if you like the deal, and the developer seems like he has his shit together and a good track record - go for it. Also, I have zero context as to what your deal is so this is mostly ramblings.", "replies": [{"id": "hi7w8og", "text": "You nailed it! Multi unit building and multiple sellers to boot. Gotta dig more into their credentials and make some calls.\n\nThanks for the input.\n\nDon't care for assignment contracts, but I'm also considering a forced released of 25% of their down payment at Escrow open. They might not like that, but it's insurance for me. Everything's negotiable.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hi82m2g", "text": "Assuming this is not a market where vacant lots fly off the shelf, it does not sound terrible at first glance. If the developer is the type to by land, get permits and flip shovel ready deals, I would ask for a fee for assignment so you get a share of the extra value created, if you think they will pump the price up by adding value.", "replies": [{"id": "hi97i7a", "text": "I appreciate your suggestion of tacking on a fee if assigned. That's a good thought.\n\nMy usual fear is that the developer flips to a 3rd party who can't close. So I make the fee but lose the deal! developers I've worked with like having that assignment option, but the potential for disaster rises in my experience.", "replies": [{"id": "hiaaksb", "text": "If that happens wouldn't you own the property with all the approvals in place? Maybe make sure there is a clause that reverts back to you if the third party can't close.", "replies": [{"id": "hibtiop", "text": "Unfortunately one would have to go through the same process of zone changing that was initially executed, which is near $6000 in my area.\n\nSo no,.not a feasible contract addendum.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hi8vjnc", "text": "This is pretty fair for a medium sized development project. It\u2019s going to depending on what \u201czoning\u201d entails in your area and what other conditions attached to closing. The zoning contingency could be just straight rezoning, but some municipalities include architecture/building permit review in zoning and others include subdivision/land development plans with the rezoning. All depends on your market. If the intent is to have the site shovel ready, it\u2019s probably a fair timeline. \n\nMost of my larger deals are 6 months for due diligence with a refundable deposit, 24-30 months for approvals and no refundable deposit, then 2 weeks to close.", "replies": [{"id": "hi983d7", "text": "Yes, yep and yup!\n\nThere are Escrow closing contingencies in regards to zoning and approvals. That's my concern. I'll place my own contingency so there is some compensation if all else fails.\n\nThank you, I appreciate your thoughts.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hi98fuo", "text": "As a developer, yes, we often use durations like this. I have a phased closing in December, February, and May on a big chunk that we\u2019ve had in escrow for almost two years. Have to get entitlements, drawings, etc. done as no lender or equity partner will close without these in place.", "replies": [{"id": "hia2xde", "text": "Thanks for the reply.\n\nThe question is, what does it cost you as the developer to tie up the property for this period of time?\n\nIs the seller pricing in this extended Escrow?\n\nAs a seller, my parcel is more valuable with it's current zoning. The developer wants to to downgrade taking the property from commercial back to multi-unit residential. I can see their plan.\n\nIt also makes sense to onboard neighbors like myself who might cause a fuss, which is the worst thing for a developer seeking a rezoning. Better to tie up potential loose ends \ud83d\ude0f", "replies": [{"id": "hias8uq", "text": "The cost to me as a developer is the non refundable deposit you mention, design and legal fees related to zoning, and opportunity cost of not using that money elsewhere on an investment I have a higher level of confidence on getting a level of return. \n\nIf you believe the parcel is worth more with its current zoning then if I were you I\u2019d be inclined to make a higher percentage of that deposit non-refundable once zoning is enacted if prior to close. That way if you have to sell to a different party at a lower price you\u2019ve made up the difference in this deal.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]