This is where you place an Option on a property, but you allow the Seller to continue to market it until you decide to exercise your right to buy. The Seller can also list it, providing you are excluded from the listing agreement. Since you are not taking it off the market, the Seller will not expect money up-front. I do not like assignments. Officials in places like NC do not like them either. I would suggest you remain in the chain of Title and do a simultaneous close. If the property is a junker, there won't be seasoning issues, because the large professional rehabbers in town will use their own all cash (or private lenders).
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A T/B doesn't apply (unless a nonexclusive L/O). They can list it, but they have to cancel the listing when you decide to exercise the Option.
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The Non-Exclusive Option (NEO) is one of our ear marks and most valuable documents. We think we invented it, but someone told me that Ron LeGrand was teaching NEO's before I came along (he could have been teaching them before I was born, as a matter of fact...and I am oooold). But whoever did it, they did a real good thing.
Our use of the NEO as we teach it is as a super device for eliminating the butterflies one has when contracting to acquire a property with no real idea as to whether it is saleable, or how long we’ll make payments until it does, or where the buyer or tenant/buyer is going to come from...much less where the money to close the deal will come from (in our case: the resident/buyer).
The idea of "our" NEO is that we want as long as possible to advertise and find a buyer or tenant/buyer before committing to the deal and taking any chances or spending any money. A 45-day option gives us time to advertise and get the party and the money we need to close the deal lined up.
If we can't find our money and/or our tenant buyer we are free to walk away, or to ask for an extension. With our programs if the party and the money are not located within 3 weeks, the deal is probably no good anyway.
The agreement within the NEO is that if the Optionor gets a better offer than ours during the term of the option, he needs to give us a 10-day notice for us to either exercise the option or get of the pot (as it were).
When making a proposal, we give the seller a completed purchase offer (but not signed) an NEO (signed), a couple authorization forms (to be able to talk to the bank about his loan), and we attach a $10 or $20 bill to the front of the package (used to use $100’s but one day said to myself: Why? Duh…). The bill is there to cause him to ask what it’s for, and that’s when we say: “Since with a non-exclusive option there is no option fee, we just attach that for legal consideration (gets them immediately away from the subject of an option fee).
As a side note, I never record the option; although I make them think I am…I just don’t want the hassle of releasing it, or fighting or arguing if they do change their minds. My years have taught that walking away from a fight means living to walk away from the next one (and it helps with the blood pressure too).
Why pay them anything? You're not taking their property off the market. I pay zero. Contractual Consideration (not Option Consideration, however) need not be cash.
[addsig]
I even let them list with an agent, as long as they exclude me from the listing agreement. Most won't, but they appreciate my giving them the freedom to do so.
[addsig]
This is where you place an Option on a property, but you allow the Seller to continue to market it until you decide to exercise your right to buy. The Seller can also list it, providing you are excluded from the listing agreement. Since you are not taking it off the market, the Seller will not expect money up-front. I do not like assignments. Officials in places like NC do not like them either. I would suggest you remain in the chain of Title and do a simultaneous close. If the property is a junker, there won't be seasoning issues, because the large professional rehabbers in town will use their own all cash (or private lenders).
[addsig]
is the seller still able to list it if you place a T/B??
A T/B doesn't apply (unless a nonexclusive L/O). They can list it, but they have to cancel the listing when you decide to exercise the Option.
[addsig]
The Non-Exclusive Option (NEO) is one of our ear marks and most valuable documents. We think we invented it, but someone told me that Ron LeGrand was teaching NEO's before I came along (he could have been teaching them before I was born, as a matter of fact...and I am oooold). But whoever did it, they did a real good thing.
Our use of the NEO as we teach it is as a super device for eliminating the butterflies one has when contracting to acquire a property with no real idea as to whether it is saleable, or how long we’ll make payments until it does, or where the buyer or tenant/buyer is going to come from...much less where the money to close the deal will come from (in our case: the resident/buyer).
The idea of "our" NEO is that we want as long as possible to advertise and find a buyer or tenant/buyer before committing to the deal and taking any chances or spending any money. A 45-day option gives us time to advertise and get the party and the money we need to close the deal lined up.
If we can't find our money and/or our tenant buyer we are free to walk away, or to ask for an extension. With our programs if the party and the money are not located within 3 weeks, the deal is probably no good anyway.
The agreement within the NEO is that if the Optionor gets a better offer than ours during the term of the option, he needs to give us a 10-day notice for us to either exercise the option or get of the pot (as it were).
When making a proposal, we give the seller a completed purchase offer (but not signed) an NEO (signed), a couple authorization forms (to be able to talk to the bank about his loan), and we attach a $10 or $20 bill to the front of the package (used to use $100’s but one day said to myself: Why? Duh…). The bill is there to cause him to ask what it’s for, and that’s when we say: “Since with a non-exclusive option there is no option fee, we just attach that for legal consideration (gets them immediately away from the subject of an option fee).
As a side note, I never record the option; although I make them think I am…I just don’t want the hassle of releasing it, or fighting or arguing if they do change their minds. My years have taught that walking away from a fight means living to walk away from the next one (and it helps with the blood pressure too).
Bill Gatten
Why pay them anything? You're not taking their property off the market. I pay zero. Contractual Consideration (not Option Consideration, however) need not be cash.
[addsig]
I even let them list with an agent, as long as they exclude me from the listing agreement. Most won't, but they appreciate my giving them the freedom to do so.
[addsig]