I want to pose an interesting variation to an 'option to buy' contract.
An acquaintance is considering selling their house, which has recently been rezoned medium density. They have been agent hunting, all of who are putting an option contract into discussions as there are a few developers active in the area.
Can a vendor with a 2 year purchase option over the property (from the developer) sell to an investor at a fair price, with the knowledge that there is an exercisable option over the property, leaving sufficient fat in the deal for the investor if the option is exercised? Does the holder of the option have first right of refusal?
(The premium is around 30-40% above market on today's value, vendor would be looking at taking 10-15% considering stamp duty would take $30-40k out of the deal).
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