I normally deal with short sales and foreclosures and I’m currently dealing with something new. Any help would be greatly appreciated. I have a owner of a 2 fam who wants out. The property is worth 76k and their willing to take 45k. I have some people interested (listed it for 57k) but I’m not sure how to protect myself from them bypassing me and going directly to the owner. I was thinking about having something in writing between the seller and me that states any buyer I bring to the table for what ever purchase price, they seller gets the 45k and I get the difference. I was told an option would work. Any advice?
You definitely don’t want to rely on a verbal agreement with the homeowner. Where there is money involved, there are thieves. You’ll be burned, I assure you.
Instead, as you have already stated, a simple way to protect your position is to with Pure Option Agreement. Lock in the agreed to price and the time frame, then record a Memo of the option with the county. Now you can rest assured that anyone trying to go around you will run into problems.
I would do the option as well, and I personally feel you could make a lot more money here. Do an option with the seller for what he wants then lease option the property out for retail. You’ll get an option amount down, plus the appreciated amount set for your lease option to a tenant/buyer. 9 out of 10 dont exercise their option, so you simply keep the nonrefundable option payment and start all over. I’m new at this but from what I’ve read it works really well.
tamahitter, you are confusing a Pure Option with a Lease with an Option to Purchase. They are quite different. The Pure Option has no provisions for leasing the property. It simply gives you the right to purchase the property at an agreed to price within an agreed to time frame. Nothing more.
Maybe I am, but he said nothing of Pure Option, I merely just said what I would do, and I guess that would be a Lease with an Option to Purchase. :biggrin