In most lockout contracts, the exclusivity period is short-lived. It is unlikely that the landowner will accept an unnecessarily long exclusivity period unless a valuable consideration is paid for incentives in his favour. While these agreements do not guarantee the conclusion of a sales contract, they can at least offer buyers a firm exclusivity period. The goal is to give buyers time to negotiate (and to do fees such as research and surveys) without fear that the seller will continue to talk to other interested parties. What obligations should the seller impose on the buyer? At least the seller wants the buyer to start doing his due diligence (for example. B submit research, conduct environmental studies and take measurements within a specific time frame). It may even be appropriate to clarify that if these deadlines are not met, the seller should have the right to determine the agreement. It is also important that each lockout agreement defines precisely a lockout period. When does it start? When is it over? If a trigger date is to be the date on which the information is provided, the nature of the information to be provided should be indicated in order to avoid any misunderstanding.
The prohibition period must be clearly defined. In addition, commitments are set for both parties. The seller may be subject to conditions such as . B not to talk to third parties in the context of a sale; cooperate with the buyer and allow the buyer to carry out research and requests as well as local inspections; and ask lawyers to immediately send a draft contract to the buyer. The extraction process can be long. For buyers, the existence of a lockout agreement gives them a sense of certainty that no one will be able to buy the property they are buying. It prevents the seller from making further offers during the period covered by the lockout agreement. In a growing market, buyers are exposed to the risk of spending time and money investigating a property only to find that the seller decides to sue with another party.
Sellers want to maximize rising real estate prices and take full advantage of their agents` marketing efforts by selling quickly to the highest bidder, instead of wasting time with slow or undecided potential buyers.