How long a term do you give yourself on options

Bird Dogs, Wholesaling
1

I am considering placing an option on a house in my area. It’s a good house in a good area that doesn’t need any repairs. I don’t have a buyer lined up yet, but don’t want this deal to slip away, nor do I want to make any lease payments. I plan on giving $1000 as the option. How long should I have the option term for? A month, 3 months, a year?

What do I do if I can’t find a buyer within the option period or if I have a buyer whose closing stretches beyond that.

Your input would be greatly appreciated,

Thanks

2

As long as you don’t have to make the payments would be great, the longer the better. If you can’t find a buyer then don’t exersize the option and move on.Herbster

3

$1000 option?? I would NOT do that. Option money is not refundable…if for some reason you can’t find a buyer/close you will be out a grand…unless you can afford that, I would simply do a standard $10 option.

As far as time, I’d do at least 6 months. Remember, this option still allows the seller to try and locate a buyer and market as they please.

The option simply gives you equitable interest and allows you to legally market a house without acting as a realtor; it also gives you the right of first refusal: if the seller has a buyer ready to purchase, they must first see if you want to purchase.

Hope that helped!

4

Agreed the less the option fee the better.

5

I use a $10.00 deposit on every deal. I also try for 1 yr. but no less than 6 months.

6

I use $10 as well, with at least 90 days for my options.

What I normally do in addition to that is make sure that I have a pre-approved buyer identified before I even go through the process of entering an option agreement. The reason I do that is because it gives me a lot more leverage against the seller and limits my marketing expenses. :beer

7

How can you have a buyer lined up before you have the house under option?

8

Use the other houses that you have in inventory or are marketing as bait. Some of the people that will respond to your marketing will qualify for the house that you have in inventory; for those that don’t qualify for your house but do qualify for a house, the task for you is to simply find them a house. Once you find one that fits what they like and can do, place it under an option contract and close the deal.

9

Hmm that sounds like a good idea. Have you done any retail flipping?

10

Yup. I use a separate site www.ourhomeiscalling.com for retail homes. I do this because home buyers are fickle; if all they see on a site are ugly houses on their first visit, that’s all they think you have and may not come back. I also use separate wholesale and retail sites because sometimes I’ll sell the same house at a wholesale and a retail price; don’t want retail buyers to know this.