Hi again,
When using a Flex Option contract, would I need to make a deposit?? Dont know what it looks like or were I can get just this form. It will be much appreciated.
rconline
I never do and if you need one PM me your email addy and I’ll send you one of mine.
For option consideration, I put down $1.
My consideration is to do the marketing of the property.
99% of the time, with options you do not need to
put down any earnest money.
Some folks put down $10, but I wouldn’t make it
a practice to do that!
I love the “My consideration is to put down that I will do the marketing for the property”…genius…wasn’t sure how to word it or what to put. Thanks!
D
In the states I invest in an option without any option money in unenforceable so anyone who won’t pay $1 or $10 dollars for an option is an idiot.
Consideration need not be cash but unless you are a licensed agent, using marketing the property as the consideration will put you in the sights of the state licensing authority in most states.
I’m sure one day one of your knowledgeable competitors will like the technique though, and will be smiling as they make the call to the state office of real estate licensing.
What states make having no earnest money unenforceable? I invest in
many different states and don’t ever put earnest money down in most
of my creative transactions…
Also, to be protected on this, simply have in your contract that in cosideration
of $10…
100% of the time the seller never asks for the
consideration anyway so you’re not even out $10 if you don’t go through
with the deal…
I want to thanks all for your help!!
rconline
[What states make having no earnest money unenforceable? I invest in
many different states and don’t ever put earnest money down in most
of my creative transactions…
Jeff
First you need to learn the difference between option money and earnest money, two different things.
I said consideration is required for an enforceable option, that includes the 7 states I have invested in and I’m willing to bet it applies to where ever you do business too, because it is based on the law of enforceable contracts.
Earnest money however is not required because in most states, if not all, your consideration is one parties promise to buy, and the other parties promise to sell.
With an option the two promises do not exist because your not promising to buy. Thus the requirement for something else like a dollar, simple, yes.
Consideration could legally be love and affection. You don’t need to have actually dollars on the table to make it legally binding.
Hello Mr. Investor, I am also getting into Flex Options but not sure what contract to use and/or want to make sure it’s the correct and precise one. Would you be so kind as to forward me a copy as well. I would EXTREMELY appreciate it as i’m having a hard time find the right form. :banghead I appreciate your help :biggrin
Yes, consideration can be anything. If you’ve bought a lot of properties, you might
have run across a seller that was quit claimed a deed from a loved one, their consideration
being what Rich_in_CT stated, “love and affection.”
Consideration doesn’t have to be money.
We even do deals where earnest money is not required up front, even though most of our
deals are only $10 earnest money/option consideration. We do too many deals to be putting
up $10 upfront…