anyone w/advice & info re: option contracts. Anyone doing these? Tx
I have saw guys using these here in SC to tie up tracks of land when the market was hot
The option contract is a great tool. The contract I have allows you the Investor “B” to market and list the house for sale on the MLS. It also allows you enter into a P & S agreement as the seller. Great way to profit and never own the home. You can also close these transaction with no money out of pocket by using Private Funding.
As a short sale negotiator for a bank, whenever I see an Option Contract I give the agent 48 hours to provide a valid purchase agreement without the terms option, nominee, assignable, or assignee. If not received within 48 hours the account is closed until another offer is received on the property.
Why? Lots of times an end Buyer is not willing to wait months for a response from the bank on their offer. Having an experienced shortsale investor make their offer (not even using an assignee clause) regardless of whether they sell it again or not makes things go smoother for everyone IMO. So, why do you reject their offer?
if it is an option it is not really a viable purchase agreement in the eyes of the bank
some lenders won’t allow an option agreement so you will have to use a purchase agreement, that lender was Ocwen. lenders won’t to know they have a solid buyer and an option provides them no security and only ties up a property. i no longer use options for short sales. options are perfect for just about every other transaction.
also if the lender ever balks over an option agreement, just get them a purchase agreement. they want to work with people that make their job easier.
CharlettePlayer, can u use an option contract with an REO? Then flip to an FHA buyer?
We use an option contract to purchase short sales, among other properties as well in some cases. In a short sale, if the Loss Mitigation rep said what the above person said, we would use a regular real estate contract and attach our option as an addendum. I’ve NEVER (and I’ve done dozens of short sales now) ever had a lender say I can’t use one.