Legal Begals - how do I secure a future house purchase ?

[Bluekiwi]

Okay I have bought a great rental, but realised that if I buy next door, I also have subdivision potential.
So I want to buy them out, but I am reasonably sure they are settled home owners and dont want to sell yet.
But I am a patient man, I am happy to buy in 3 or 5 or 10 years time.

Is there any way that I can set up a legal agreement they have to sell to me in the future, at some time and some price ?

I know you can have "Options" and stuff like that.
But what about something more simple.

Where we work out a price now, and they have to sell to me, within the next 5 years.
And as part of that agreement I pay them 50k deposit now ?

I am just brainstorming idea's before I go and see them.
As under the current zoning, its 1 new lot, under the "Proposed" Unitary Plan, its actually 3 new lots.

[Leftette]

As long as there are willing parties, I think you can contract anything you like, but your neighbour would be mad to do this in the current market. And even if the market was dropping or even stable, then they should be asking themselves what if YOUR situation changes and you change your mind (or the bank changes it for you) - will you want the deposit back? I'd stay well clear if I was the neighbour. Just sayin'.

[Bluekiwi]

As long as there are willing parties, I think you can contract anything you like, but your neighbour would be mad to do this in the current market. And even if the market was dropping or even stable, then they should be asking themselves what if YOUR situation changes and you change your mind (or the bank changes it for you) - will you want the deposit back? I'd stay well clear if I was the neighbour. Just sayin'.

No thats good I am trying to see it from both sides, excellent stuff TLL.
But I want to also convey to them, that I am the man that will give them the best price when they do decide to sell, there property is worth more to me than anyone else.
I guess I need to establish their intentions first and then work from there.

But me reneging on the contract would be goodbye to my deposit, thats just real estate law of the jungle

[Leftette]

If it were me, I'd have them over for a BBQ when it warms a tad and over some beers, make it clear that you are seriously interested and should they want to sell, to give you first option (and that they won't need to pay commission). Don't mention that you won't pay it either.

[Leftette]

TLL is gone, Bluekiwi. He's visiting the northern hemisphere's various Burning Man events. He feels at one with the spiritual guidance offered, and needs to seek solace since being penalised for no reason. That can wreck a man's equilibrium, you know.

[Orkibi]

You can use a usual standard S&P agreement and have an option clause in it.. if you get the house at CV or below today, in Auckland. you will be doing well in 5 years.

simple option doc would be ideal. GOOD Luck

[Wayne]

How about buy an option to have 1st refusal in the next 10 years. Get a lawyer to write one up that gives you say 14 days right of 1st refusal when, in the future, they decide to sell. Pay them some money to sign and there you go. This won't be much of a drag on them in the future so they should be happy.

If I was the neighbour I would be expecting a few $ to sign the option.

[Ivan McIntosh]

Okay I have bought a great rental, but realised that if I buy next door, I also have subdivision potential.
So I want to buy them out, but I am reasonably sure they are settled home owners and dont want to sell yet.
But I am a patient man, I am happy to buy in 3 or 5 or 10 years time.

Is there any way that I can set up a legal agreement they have to sell to me in the future, at some time and some price ?

I know you can have "Options" and stuff like that.
But what about something more simple.

Where we work out a price now, and they have to sell to me, within the next 5 years.
And as part of that agreement I pay them 50k deposit now ?

I am just brainstorming idea's before I go and see them.
As under the current zoning, its 1 new lot, under the "Proposed" Unitary Plan, its actually 3 new lots.

An option would be better, and its no more complex than what you have set out in your post. What you're proposing is more a long term purchase agreement, and you'd want to talk to your accountant about the tax implications.

You'd want a caveat on the title to safeguard your deposit btw. Also, you are running a risk if they get into financial difficulty before you purchase...you might find your deposit is gone and their bank won't allow the sale to proceed.

Like the others, I coulnd't see anyone going for a fixed price that lasts five years....you're more likely to get a right of first refusal at best if you're nice to them. Still, have a chat to them....you never know till you ask.

[BlueSky]

Okay I have bought a great rental, but realised that if I buy next door, I also have subdivision potential.

Good on you, was it recent?. what is the yield like. subdivision potential - please elaborate.

I would start to get to know them first, you know new neigbour and all. Then show your hand. upside is that they get top dollar, downside is that you loose your deposit.

[halfempty]

What your after is a "First rite of Refusal".

This is a contract that say's if they wish to sell they can list the property and if they receive an offer they have to give you the right to offer the same or turn it down before they accept the other offer.

You would normally pay a fee upfront for the "FRR" contract and you would caveat their property to protect your interest.
I have a few of these running, one I bought out after 6 months and another has been in place for 12 years.

It doesn't mean you get any sort of discount but it means you get to pay close to a fair market value for a strategic asset that you might want very badly.

[Wayne]

What your after is a "First rite of Refusal".

what sort of rite would that be? Any dancing? Or would that be right of refusal?

[speights boy]

Wayne.
Just as well The Liberal Left has been transported to the home for the perpetually bemused, otherwise we would be bombarded with images such as:

[Leftette]

You must be on his mailing list, SB.

[Bluekiwi]

That picture is changing by the minute, I prefer the other one speights as one of the guys was the spitting image of TLL with beard and all

[speights boy]

BK
As it is your thread it is back.
Yes, you are correct re the "disguise"

I just didn't want to make it too easy for the GCSB Prism network, as I understand they are monitoring TLL's travels closely.