It is reasonable if acceptable by the purchaser.

Why don't you use a conditional contract that is subject to the zoning, etc. if the buyer is paying for the process.

Seems low to me but, I don't know what your market is like, Paul. 

reasonable would depend facts not included such as whether for the Buyer or Seller, and other factors, some as mentioned by Fred Griffin .  I think Barbara Todaro gave a detailed explanation why an option may not be considered the best path.

I wouldn't tie up a property for 2 months for  $1000.00

    Will the option money apply to the purchase price?   

      Please explain, "dilapidated".  Do you mean junk, abandoned buildings, buried fuel tanks, EPA brownfield?   How much will it cost to get the land in shape for permitting?

You have many great answers here.

after reading the comments, option is not what we use for that.  We simply do it with contingencies and protect our buyers EMD if they can't use the land for it's intended purpose.

As an optioner I couldn't see giving up some rights to a property for a total of 16 weeks for such a small sum. As an optionee, if I thought it would work, I'd be dishing out these deals left & right. I don't think I can ever remember anything less than 20% that came to fruition and I've done a bunch.  

Hmm note to self: ponder reasonable. 

This is virtually impossible to answer not knowing what dilapidated means, what the seller's interest is, demand for the property, etc. In 25 years I've yet to do any kind of option on a property purchase... I haven't found that sellers are especially receptive to option offers.

why is an option needed???

Don't have enough information to make an informed decision.  

Do you think it's reasonable? Not knowing anything about your market, it would be pretty hard for others to opine from the outside looking in.

Whatever is customary in your market and the buyer will accept is reasonable. I know you want more, but we have not of the facts of the deal or your market.

Tighten up those timelines.

Many dilapidated lots sell more than empty clean lots. The last one I saw in the paper as national news sold over $1M.... A clean empty sold $200K less.

In our area cash 1 week closing. Want to back out you lose 10% EMD.

Not really

Something new I learned from old question! 

Thank you.

Whatever is agreed to is reasonable.

We don't have options in Denver.

Not enough information. Options could be written/structured in many different ways.

I would do a contract with an extended feasibility study to find out what the city/county agencies would allow to happen there. If the property was listed in my area, this would be expected.  If it's an unlisted property the seller may be thrilled to have something happening, unless they planned to develop it themselves. 

Good luck.

What is reasonable?

Beyond that, I do not see why an option would be necessary. 

I've used options in real estate successfully as an investor in the past...and I've got to say...I'm with Tammy Lankford, on this one. 

Not enough details to answer

If it works for both parties it can be reasonable.

If the seller accepts it why not? Why does the buyer think this is a good offer? What are the problems and does the option money go toward the purchase price?

Jeff Pearl nailed this one!

Paul Weese - checking other answers! Not good at this.

All about supply and demand and what they buyer is willing to pay.

Sorry, I don't do options so I can't advise.

I use 10% as the option amount with a solid closing date