1st Lease Option Deal Need Clarification
I want to make sure I complete this correctly. I have studied L/O through the Ron Legrand course, so these are the documents I am referring to.
To take control of the property I will complete an Affidavit and Memorandum to be recorded with county to show I have an interest in this property. I will complete a Lease Agreement with Option to Puchase Real Estate.
I am also meeting a with a tenant buyer, romorrow. If they take the property I should complete a residential lease agreement. DO I also complete a Purchase and Sales Agreement to show the option fee as the binder deposit, and put the closing date for the term agreed to?? :-?
Depending on your states' laws you may want to use a separate lease and a separate option contract. If the contracts are worded fairly to both the buyer and seller you will want to use the same agreement when "buying" and "selling".
Alternativly you can use a very buyer orinted one when aquiring the property and a seller oriented one with your tenant/buyer.
The purpose of the separate agreement is if you have to evict. The judge will ask for a copy of the lease and you will likely have an easier time than if he sees the option agreement. He may ask for it but don't make things harder than it is. With an option agreement in place some states consider that the T/B has an equitable interest in the property and you may have to foreclosure rather than evict.
There is no purchase and sales agreement. The option agreement will show the option fee. The lease agreement will show a refundable security deposit (if desired).
Yes you are correct in that you can file an affidavit and memorandum of agreement with the recorders office. This is not required and may or may not accomplish what you are looking for.
You may consider using a "Performance Mortgage" which in a nutshell states that if the seller fails to execute a marketable title as agreed by the option agreement that the seller owes you $XX. If they don't do it you can start foreclosure proceedings to take back the house. This is a very powerful contract if done correctly.
This is just a summary but I think you are on the right track. GOOD LUCK