Before earnest money goes hard on a Phoenix-area land deal, buyers need a systematic way to test what they're purchasing. The land feasibility period checklist below covers the soil, zoning, water, and title work that separates a clean acquisition from a costly surprise, timed to fit inside a standard land brokerage contract window.
By David Pierce, MHG Commercial
What Is a Feasibility Period in a Commercial Land Deal?
A feasibility period is the window in a commercial land contract, typically opening at execution, during which the buyer investigates the property before committing nonrefundable funds. In Arizona real estate practice, this period functions as the buyer's due diligence process: the time to make sure the parcel can actually support the intended use before earnest money goes hard. For raw or vacant land, feasibility work usually runs deeper than a standard due diligence process on an improved building, because the buyer is testing unknowns a finished structure would already have answered: soil composition, utility access, floodplain status, and zoning entitlements among them.
How Long Does a Land Feasibility Period Typically Last?
Feasibility periods on Phoenix-metro land deals commonly run 30 to 90 days, though the right length depends on the complexity of the site and the buyer's intended project. A retail pad ready for a single tenant may need less time than a multi-phase industrial or multifamily development requiring extensive engineering and planning. Larger or more technical acquisitions, land requiring rezoning, annexation, or master-planned infrastructure, often justify a longer period negotiated upfront rather than requested later. The length is a negotiated deal term, not a fixed standard, so buyers should size it to the actual scope of testing required rather than defaulting to a generic timeframe.
What Belongs on the Land Feasibility Period Checklist?
The land feasibility period checklist covers every category where a bad assumption becomes a bad closing. At minimum, buyers and their brokers review:
- Title and survey. Pull a current title commitment and ALTA survey to confirm boundaries, easements, and any recorded restrictions that could limit the intended use.
- Zoning and entitlements. Confirm the parcel's current zoning matches the planned use, and identify what a rezoning, variance, or conditional use permit would require if it doesn't.
- Soil and geotechnical conditions. Order a geotechnical report to test load-bearing capacity, expansive soils, and grading requirements before building costs and construction estimates are finalized.
- Environmental status. A Phase I Environmental Site Assessment checks the site and surrounding areas for contamination history and wetlands indicators; a Phase II follows only if the Phase I flags a concern.
- Water, sewer, and septic. Confirm whether the parcel has access to municipal water and sewer or will require a septic system, and verify capacity directly with the local utility provider.
- Floodplain and drainage. Check FEMA flood maps and drainage requirements, particularly for vacant land near washes or floodplain-adjacent parcels common across Phoenix-metro suburbs.
- Financial underwriting. Re-run the deal's financial model once real testing costs and any required improvements are known, not just the assumptions baked into the original offer.
Working through the land feasibility period checklist in order keeps testing costs proportional to what's actually at risk on the parcel, and it gives the buyer a documented record if a finding later needs to support a termination or a renegotiation.
When Does Earnest Money Go Hard, and How Do You Avoid It Happening Too Soon?
Earnest money "goes hard" when the feasibility period expires and the deposit becomes nonrefundable except for a handful of contract-specified outs, typically title defects or seller default. Until that date passes, the buyer can generally terminate and recover earnest money for any reason or no reason, depending on how the purchase contract is written. Avoiding an early hard date comes down to sequencing: order the slowest-moving studies (environmental, geotechnical, entitlement research) on day one, track each report's turnaround against the feasibility deadline, and build in a buffer for a report that comes back with an unexpected finding requiring a follow-up test.
Is Earnest Money Refundable During the Feasibility Period?
In most Arizona land contracts, earnest money is fully refundable to the buyer at any point before the feasibility period ends, and the buyer can typically terminate without cause. Once the period ends and earnest money goes hard, refund rights usually narrow to specific contingencies named in the contract, so buyers should read that termination language closely before the deadline rather than after it.
How Much Earnest Money Is Typical on a Land Purchase Contract?
Earnest money on Phoenix-metro land deals typically runs 1 to 5 percent of the purchase price, though larger or more competitive deals sometimes carry a higher deposit to strengthen the offer. The amount is negotiated per deal rather than fixed by convention, and sellers on larger parcels may ask for a portion of the deposit to go hard at contract execution in exchange for a longer feasibility period.
Who Pays for Feasibility Studies, the Buyer or the Seller?
The buyer typically pays for feasibility studies, since the buyer is the party deciding whether to proceed with the purchase. Sellers sometimes share existing reports, a prior Phase I or a recent survey, to shorten the buyer's diligence process, but a buyer should still verify or refresh any study more than a year or two old rather than relying on it outright.
Buyers planning a ground-up build once land clears feasibility can get entitlement and site-plan timelines from Pierce CRE's new development team before earnest money goes hard.
Extending the Feasibility Period and Handling a Dealbreaker
Can You Extend a Feasibility Period?
Many land contracts include an extension option, often a single 15- to 30-day extension in exchange for an additional earnest money deposit that goes hard immediately. If the contract doesn't include one, an extension has to be negotiated with the seller directly, and there's no guarantee the seller will agree, particularly in a competitive market where a backup offer exists. This matters most on land development deals where infrastructure phasing or a municipal will-serve letter can run past a standard timeline. Buyers who know a slow-moving study is likely to miss the deadline should raise an extension request before the deadline, not after it passes.
What Should You Do If Feasibility Testing Turns Up a Dealbreaker on the Land?
A finding that changes the deal, contaminated soil, insufficient water rights, a zoning designation that won't support the planned use, is exactly what the feasibility period exists to catch. The buyer's options are to terminate and recover earnest money, renegotiate price or terms to reflect the added cost or risk, or, if the issue is fixable, request that the seller cure it (a title defect, for example) before closing. The critical step is documenting the finding in writing before the deadline, since verbal notice of a problem generally doesn't preserve a buyer's termination rights.
Frequently Asked Questions
What's the Difference Between a Feasibility Period and a Due Diligence Period? In Arizona commercial real estate, the two terms are often used interchangeably in land contracts, though "feasibility period" typically emphasizes site and physical testing (soil, zoning, environmental), while "due diligence period" can extend to broader review: title, financials, existing leases. On many land purchase contracts they describe the same window and the same earnest money mechanics, so buyers should check the contract's defined terms rather than assume based on the label alone.
What Happens If You Miss the Feasibility Period Deadline? If the buyer doesn't terminate or request an extension before the feasibility period ends, earnest money typically goes hard automatically under most Arizona land contracts, and the buyer loses the ability to walk away without cause. Missing the deadline doesn't usually void the contract; it shifts the buyer from a low-risk testing window into a committed purchase, which is why tracking the calendar date matters as much as the testing itself.
Is a Feasibility Study the Same as a Survey? No. A survey confirms boundaries, easements, and legal description; a feasibility study is broader and can include soil testing, environmental review, zoning confirmation, and financial underwriting. A survey is one input among several feasibility studies a buyer typically orders during the feasibility period, not a substitute for the others.
Can You Shorten a Feasibility Period to Make an Offer More Competitive? Yes, and on competitive Phoenix-metro land listings a shorter feasibility period can strengthen an offer. The tradeoff is real: a compressed period leaves less time to complete a full due diligence process, so buyers who shorten it should have financing and key vendors (surveyor, geotechnical engineer, environmental consultant) lined up before submitting the offer.
Get Your Land Feasibility Timeline Reviewed Before You Submit an Offer
Pierce CRE structures feasibility periods and checklist scope around the specific site, zoning, and utility questions each Phoenix-metro parcel raises. Contact our brokerage to review the land feasibility period checklist for your next land acquisition before earnest money goes hard.
