What is a key benefit of a land option for a developer?

A key benefit of a land option for a developer is that it allows the developer to lock in a land price before making a purchase. This is particularly advantageous in real estate, where market prices can fluctuate significantly over time. By securing the land at a predetermined price, the developer mitigates the risk of rising land costs that could occur before they finalize the purchase.

While immediate access to land for construction could be perceived as a benefit, in many cases, an option does not grant the developer the right to commence construction until the purchase is complete. Additionally, increased property taxes during the option period and guaranteed financing from lenders are not typical benefits associated with a land option. Instead, a land option typically involves a lower financial commitment during the option period, allowing developers to assess the viability of their project before fully committing to the purchase.