What are your thoughts on Optioning a commercial property? Length, etc?
That is a broad question.
Do you have a particular deal in mind?
Sorry for being broad, I was just asking in gerneral are options used on commercial deals to either buy time for further inspection or to potentially flip to another party?
The reason I ask. I currently have interests in a Mixed Use property, with a cash buyer on hand who is serious about purchasing from me. I would like to put an option on the property for 15 days to give us time to work out the specifics of my buyers offer.
I know I could put an offer 60 days out contingent upon financing, but I don’t want to leave a bad taste in anyones mouth. I am trying to be sensitive to everyones time, interests, etc.
Does that make sense at all? I am just trying to figure out the best way to structure everything. I was also interested in the ways to get control of commercial properties to structure better deals.
Thanks for the help
A 15 day option is good. You should have some kind of wording in the option that once that if the option is exercised the buyer has 30-45 days from that time to close the deal (financing, appraisal, etc.)
Options are frequently used in commercial deals, and you will find that they come in various forms and types.
Many times, a buyer will pay a small fee for a right of first offer or right of first refusal for a piece of property (land, improved property, etc.) that is not moving quickly in the market, in order to get together a financing package or assemble other pieces of land.
In most transactions, a buyer will post refundable earnest funds for a period of time in order to get a commercial property under contract. At the end of the feasibility period, the buyer is forced to make the deposited funds non-refundable (ending the option period).
Let me know if that helps or if you have any further questions.