With today's market the way it is, many active home buyers are looking for ways to continue buying but at the same time lower risk. For some people that is easier said than done. However, I'm willing to bet that most people are unaware of a simple buying strategy that has existed for years. Buying strategies that even Donald Trump has incorporated in his early investment career. This strategy is known as the option to purchase real estate.
A real estate option is not to be confused with a lease option. They are 2 entirely different things. Basically, a lease option is where the owner of a house becomes a landlord, allowing the person renting the house the option to buy it after a certain amount of time. Where as an option to purchase does not involve that. The great thing about a simple option is that you never have to buy the house. Risk is almost zero with this type of contract. The only thing you stand to lose is the option deposit money. With an option you are not putting an earnest money deposit down right away. That will come only when you decide to buy within the term. I generally give sellers $10 towards the option. Remember you are paying for your right to use this contract.
Now if you decide to buy the house under option, you will then need to have a standard purchase agreement signed. This contract will go more in depth about the buying process, and in the end better protect you. Another question that people ask me is if an option is assignable. The answer is, yes, you can assign an option as long as you write, "and/or assigns", after your name. A seller shouldn't have a problem with you assigning the contract as long as you disclose that to them. Our job as investors is to be as ethical as possible. What if a Realtor tells me that assigning a contract is illegal? First off, a Realtor for the most part has no clue what investors do. They have a license to sell real estate, but remember they do not have a license to practice law. They could get in plenty of trouble if they demand something is illegal. Assigning a contract is not illegal. Keep in mind that when buying a house, in order to buy it you need to bring it through a title company or closing attorney. If it were so illegal then do you think an attorney or title company would allow it? NO! So you are better off not listening to what Realtors have to say.
Options are a great way to begin investing. Especially if you do not have a lot of money to get started. They do away with risk if you do it right. You will notice that not all sellers want their house to be under an option. For the most part the seller is wanting confidence on your part and if you have an option, that doesn't portray confidence as much as a standard agreement would because remember we are not obligated to buy under an option. That is why I typically only get an option for 45 days. Most sellers aren't going to worry then because their property is not tied up for too long.
Using an option in today's market is a great way to buy. It's a must if you are trying to wholesale. I used them when I got started, and I still use them today.
Sell My House
A real estate option is not to be confused with a lease option. They are 2 entirely different things. Basically, a lease option is where the owner of a house becomes a landlord, allowing the person renting the house the option to buy it after a certain amount of time. Where as an option to purchase does not involve that. The great thing about a simple option is that you never have to buy the house. Risk is almost zero with this type of contract. The only thing you stand to lose is the option deposit money. With an option you are not putting an earnest money deposit down right away. That will come only when you decide to buy within the term. I generally give sellers $10 towards the option. Remember you are paying for your right to use this contract.
Now if you decide to buy the house under option, you will then need to have a standard purchase agreement signed. This contract will go more in depth about the buying process, and in the end better protect you. Another question that people ask me is if an option is assignable. The answer is, yes, you can assign an option as long as you write, "and/or assigns", after your name. A seller shouldn't have a problem with you assigning the contract as long as you disclose that to them. Our job as investors is to be as ethical as possible. What if a Realtor tells me that assigning a contract is illegal? First off, a Realtor for the most part has no clue what investors do. They have a license to sell real estate, but remember they do not have a license to practice law. They could get in plenty of trouble if they demand something is illegal. Assigning a contract is not illegal. Keep in mind that when buying a house, in order to buy it you need to bring it through a title company or closing attorney. If it were so illegal then do you think an attorney or title company would allow it? NO! So you are better off not listening to what Realtors have to say.
Options are a great way to begin investing. Especially if you do not have a lot of money to get started. They do away with risk if you do it right. You will notice that not all sellers want their house to be under an option. For the most part the seller is wanting confidence on your part and if you have an option, that doesn't portray confidence as much as a standard agreement would because remember we are not obligated to buy under an option. That is why I typically only get an option for 45 days. Most sellers aren't going to worry then because their property is not tied up for too long.
Using an option in today's market is a great way to buy. It's a must if you are trying to wholesale. I used them when I got started, and I still use them today.
Sell My House