Is this Ethical? Land under contract, buyer has extended for over a year, apparently it is still being marketed at a higher price than our selling price. He wants RFR so he can buy lower if someone offers a higher price.
I've got some land for sale that is under contract for more than $200k under the original asking price because the buyer was willing to buy both lots. His extensions have gone on for over a year, because apparently he hasn't found someone to lease the land and build a restaurant on it. I get it, and I don't have a problem with it because it's not a great area for new businesses right now. 

I got another 6-month extension request, plus an RFR, because apparently the realtor is still marketing the property at it's original price, even though it's under contract. 

The RFR gives him the right to buy the land at the contracted price if he does it in 48-hours after the offer, otherwise it would go to the new buyer. I guess I'm feeling like this doesn't benefit me in any way to keep giving this guy an extension since he only put up a small amount of earnest money and the last buyer weaseled out of paying that when the sale fell through.

Is this a normal practice?
[{"id": "fxjbzu2", "text": "He\u2019s shopping your deal, which is common practice. Your under no obligation to keep extending him, generally I would recommend requiring a portion of the EM go non-refundable in return for further extensions. \n\nIf he is getting permits / entitlements ask for an update on that process. You could even search your local municipality yourself as all this is public.", "replies": [{"id": "fxjc4rt", "text": "Thank you. I live across the country from the place of sale, checking local stuff is not easy.", "replies": [{"id": "fxjdrc5", "text": "It's not any harder.  Even if you were local you'd probably be calling anyway or going online.", "replies": [], "depth": 3}, {"id": "fxjj89v", "text": "Phone the city. They would do the same work if you're on the phone or waiting at the counter.", "replies": [], "depth": 3}, {"id": "fxk1ha6", "text": "&gt;  \n\nJust call the city/whatever and ask if there are any open permits or anything going on with your land.", "replies": [], "depth": 3}, {"id": "fxk1xkz", "text": "Kachness has the best advice and that is that you will extend the contract but the EM goes non refundable.  You may also want to increase the total amount of EM and have the new portion go non refundable.  They are effectively buying the right to the extension and ROFR.  This is pretty common especially in development contracts where after a certain point you have to put earnest money hard to extend the diligence or closing period. If they back out you aren\u2019t in any worse position.", "replies": [{"id": "fxkalee", "text": "That's one of the issues, the EM was less than 7% of the sale price. I hated the idea, but my sibling and I co-own and the broker has been telling me all along that it's a common practice, and since it's been on the market for so long, we should take it.", "replies": [{"id": "fxkz14b", "text": "7% would have been reasonable at the outset. As the others have suggested, in the extension it should make the current EM non-refundable such that it is released immediately but credit d against the purchase price should he proceed and ask for a further equal deposit.\n\nCheck your list agreement - your agent may be entitled to part of that EM money if it goes hard. You may want to ask that he release any right to same as he has not been effective getting this deal to go", "replies": [{"id": "fxl4vzc", "text": "I brought up the fact that nothing's happening, but he just keeps telling me no one is interested. I told him it's been under contract and he argued that the for sale sign is still up,\"for the whole world to see\". Of course, that's only if they're driving through this part of the Delta.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxjceat", "text": "It\u2019s all online bud, just call the issuing agency. Most have online portals to check active permits. \n\nAre you represented by a broker or attorney? What are they telling you?", "replies": [{"id": "fxjfozq", "text": "A broker, there aren't many in the area. I feel like it's probably in the broker's best interests because they'd get a commission on our sale, and then a commission on his if he re-sells it immediately.", "replies": [{"id": "fxjgv0u", "text": "So you are represented or the Buyer is?", "replies": [{"id": "fxjh508", "text": "I am. But the state is one where the buyer and seller can be represented by the same person.", "replies": [{"id": "fxjmun5", "text": "Duel agency is tricky, there\u2019s a reason it\u2019s illegal in many states. I would start assuming your broker is working for \u201cthe deal\u201d and not you. Start making decisions based on what\u2019s right for you, it\u2019s been mentioned buy another 6 months for free should be out of the question. Even complicated development deals only take 24 months or so to complete. If Buyer is unwilling or unable to make a portion of the EM go non refundable they don\u2019t have a high degree of confidence in the deal and is likely purely triaging your land. Again, this isn\u2019t unethical and pretty common especially for non-core assets. \n\nIf he\u2019s hoping to develop but just needs capital maybe you can explore a JV if you believe in his vision.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxjdss6", "text": "DM the address of the property, I do site selection for retailers across the US and I can give you a quick synopsis if I think you can get a deal done.", "replies": [], "depth": 1}, {"id": "fxjf1jj", "text": "Extended over a year with zero $ of hard (non-refundable) money? I don't care if your buyer is getting approvals or shopping the deal (you shouldn't either if you like the price), you need to start playing hardball. No more free extensions - another 6 months free would be ludicrous.", "replies": [{"id": "fxjfjo1", "text": "I think so, too.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fxjlly7", "text": "Seems ethical to me.  Buyer isn't asking for a very long time to respond to the ROFR.  You are not going to lose another buyer over 48 hours.  Most ROFR means he buys it at the higher agreed to price.\n\nI would imagine the existing buyer has some sunk pursuit costs.  ROFR basically gives him an opportunity to protect his investment/time (however minimal).  He also needs to be able to deliver to a user.\n\nThe earnest money should be in an escrow so he cannot \"weasel out\" of it.  There is no reason you shouldn't be collecting that.\n\nAs I understand your post, your existing buyer is letting your realtor continue to market the property - so he doesn't have a standstill clause.  The current buyer may be marketing the land at a higher price, but he is also likely going to have to provide improvements to the site before delivering it to a user.", "replies": [{"id": "fxkb7om", "text": "He wants to lock in the lower price, and if a higher price offer comes in, he can still take it if he pays the low price in 48 hours. That means he can sell it to the new buyer for the higher price. This is after a year and 3 months of extensions. He only put down 7% EM, which my broker advised me to take, stating that he'd be looking for investors to lease the land for a restaurant franchise.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fxjn0pl", "text": "You market a property till money goes hard.", "replies": [], "depth": 1}, {"id": "fxjski2", "text": "You\u2019re giving the buyer free options. That is generally not a good deal for you.", "replies": [], "depth": 1}, {"id": "fxjtsu0", "text": "Every extension now has a price - not held in escrow, payable to you.  How you determine that price will depend on the size of the deal, length of the extension, reason for extension, etc.  \n\nROFR is not free, either.  Plus that's not how this is going to work - right of first refusal allows buyer a short time to *match* the new offer, not buy at their original price.  But if they already have it under contract, it may not be relevant anyway.", "replies": [], "depth": 1}, {"id": "fxjzmpz", "text": "\u201cEthical\u201d and commercial real estate don\u2019t belong in the same sentence my g", "replies": [], "depth": 1}, {"id": "fxkexlo", "text": "Honestly 5-7% escrow on commercial transaction is well within the norm.  Is their a second amount that is escrowed at the end of the inspection period?", "replies": [{"id": "fxkfilu", "text": "No. I don't feel like it benefits me to do it for free. If he's marketing the property, who should I be stuck with the low price? It seems clear the guy doesn't have the money, but he's just trying to keep the lower rate we only agreed to because he was buying both lots.", "replies": [{"id": "fxl2ke1", "text": "Sorry I was asking if there are two parts to the escrow.  For example say I have a $10,000,000 property I am selling, at the being of the DD/inspection period I get the initial escrow deposit amount of $200,000 which is typically refundable until the end of this DD. Then that money goes hard (non-refundable) and I receive an additional escrow deposit $300,000 also non-refundable.  In a PSA there will typically be options for extending and sometimes there is an additional deposit required.  If they are not ready to conclude their DD/inspection period then it is not unusual to make some of the money go hard to extend the contract. I will say that land developments can legitimately take a long time especially as you need to secure entitlements as well as financing.", "replies": [{"id": "fxl4rl1", "text": "Yeah, there was no increase, and I'm aware that these things generally take a lot of time. I just feel like I've been discouraged by my broker and agent, who also represent the buyer, from asking for this in the past.", "replies": [{"id": "fxl5p5b", "text": "Oooh yeah unless you have a solid background in this or a very good attorney I never like having a broker rep both parties.  While he technically has a fiduciary duty to both of you there is increased incentive to close this particular deal because he is getting both sides commission.", "replies": [{"id": "fxlbnqw", "text": "The broker is the Mayor and the attorney is on the board of Aldermen. When asked, I gave the attorney 90 days to try to broker a deal several years ago(Despite not being an agent) he didn't sell it in the agreed 90 days, so I signed with the agent who had. Immediately got a letter from the board of aldermen and signed by the Mayor saying I had a hazard on the land that cost me $1,000 to clear up. \n\nWasn't a problem until I listed with someone else. I had someone look into it, and his professional reputation is in good standing so he hasn't gotten caught for anything and I just want it sold, so I didn't really care who handled it, and there was no point in getting personal because it was in their best interests to get it sold, so I signed with them. They did manage to sell one lot, but I don't doubt for a moment that they'd be happy to get two commissions, one for the sale to the guy under contract, and then his sale the the higher bidder if an offer comes in. Can't prove it, of course.", "replies": [{"id": "fxlfp9m", "text": "Wow.  That is some wild small town politics.  I might reach out to an attorney in a different part of the state.  It sounds like neither your attorney or you broker are doing you any favors.  I am not suggesting legal action but it might not be a bad idea to have someone else review and/or draft any future amendments to your purchase agreement.  \n\nBack to the original question, I would allow them to extend but part of their earnest money should go hard. I also would not extend for more than 90 days (even that is a lot of time).  At the end of that 90 days they either need to close or the contract is terminated (make sure it auto terminates).  If this happens title should release you their escrow.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxktf8j", "text": "30 days and the deposit goes hard, meaning  nonrefundable. Give him 90 more days total from the end of the current contract to figure out what he wants to do - or you find a new buyer and keep the deposit.\n\nSounds like the land is not worth much though.", "replies": [{"id": "fxkxn1t", "text": "It was appraised high, but that was a while ago. I've been listening to their suggestions and listing where they've asked. The broker claims he wasn't marketing it online, but I saw the listing myself. He got upset and said I could say no, and handle it myself. He said no one's been interested except this guy, but he hasn't suggested lowering the price, either.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fxl6ux6", "text": "D", "replies": [], "depth": 1}, {"id": "fxl70zf", "text": "I'd say no more extensions, either pay for an option. Something like, 5%-10% of the current contract price up front in your pocket for first right of refusal for a year (at the current contract price).", "replies": [], "depth": 1}]