Does this $4M offer on 30 acres look off? 7 mos Due Diligence

[Ericka G.]

TLDR: Is $5k earnest money on a $4M offer (30 acres with electric but no sewer) and 7 mos due diligence ridiculous or standard for land offers? What is the standard for EM and due diligence on land deals?

Dad has 30 acres of 100+ year old family land in what was the "country" and has now become an elite suburb. It has an old farm house with electricity and a well but no public sewer line connection yet. He got an offer for $4M from a non profit seeking to preserve historic battlefields (they purchased another, simillar nearby parcel for $9M) but they are only offering $5k of earnest money and requesting 7 months of due diligence. These terms seem ridiculous to me but I know nothing about land deals and neither does anyone else in our orbit.

He had another offer from a developer that with a long due diligence that fell apart b/c of some local bureacracy trying to halt further developments until more roads were built.

Curious what is the norm for earnest money and due diligence on land deals?

Thanks for any input!

[Alioune Camara]

Quote from @Ericka G.:

TLDR: Is $5k earnest money on a $4M offer (30 acres with electric but no sewer) and 7 mos due diligence ridiculous or standard for land offers? What is the standard for EM and due diligence on land deals?

Dad has 30 acres of 100+ year old family land in what was the "country" and has now become an elite suburb. It has an old farm house with electricity and a well but no public sewer line connection yet. He got an offer for $4M from a non profit seeking to preserve historic battlefields (they purchased another, simillar nearby parcel for $9M) but they are only offering $5k of earnest money and requesting 7 months of due diligence. These terms seem ridiculous to me but I know nothing about land deals and neither does anyone else in our orbit.

He had another offer from a developer that with a long due diligence that fell apart b/c of some local bureacracy trying to halt further developments until more roads were built.

Curious what is the norm for earnest money and due diligence on land deals?

Thanks for any input!

In the world of institutional land acquisition and non-profit conservation, a seven-month due diligence period is actually standard because the buyer is performing deep-dive environmental assessments and securing capital, but the $5,000 earnest money is a "soft" play that gives them a virtually free option to tie up a $4M asset with zero skin in the game. To protect your family's equity, you should push for a higher deposit—ideally closer to 1%—and negotiate a "go-hard" date where that money becomes non-refundable after 60 or 90 days to ensure they aren't just using your dad's land to test their fundraising capabilities. You should also mandate that all surveys and reports become your father’s property if they walk away, and given that a nearby parcel went for $9M, make sure you aren't leaving money on the table just because this buyer's mission sounds noble; at this price point, they need to pay for the right to keep this property off the market. I hope that helps.