How to insure an Option without offending Optionor

Read a report concerning using “Pure Option” to gain control of real estate properties. In the report the author states: “to insure the Option transaction will be completed successfully, execute and place into escrow all the documents necessary to transfer title. Then protect your equity position and create an insurable interest by recording a mortgage to insure the Optionor’s performance on that option”.

While I do understand the purpose of placing all documents necessary in escrow in order to close anytime during the option period: I’m not certain how to explain to the Optionor that he/she has to give me a mortgage to insure his/her performance on the Option without questioning his/her integrity.

Any help would be apprecated.



I don’t use the performance mortgage, but I know Bill Bronchick does. I am sure he has a very good reason for that. I have not had to worry about these type of issues yet with a seller, as my sellers are individuals that are financially stable, etc. This doesn’t mean that they couldn’t have something bad happen to them, but in general they will go well if you screen your owner too (not just the tenant). I do like to have a deed signed and placed into escrow and I record a memorandum of lease option, lease purchase, option, depending on the deal. This is the main thing that will protect your interest and start the seasoning of the title.

Wendy Patton