Option To Purchase Question
I'm going to start flipping houses and was told that it was a good idea to use an option to purchase agreement instead of a purchase agreement in case I can't find a buyer. My question is.....how do I approach a seller with an option agreement? Won't they wonder why I don't have a purchase agreement? I just don't know the language to use when approaching a motivated seller and using an option to purchase agreement. Also, do I tie up their house exclusively? How many days.....30, 60?
Thanks for any help!
There is more than one school of thought on this. Some people will advise you to get options on everything, and to get as many of these as you can. The theory here is "Throw enough stuff against the wall, and some of it will stick." What they don't tell you is that you are putting some money down as "non-refundable option consideration" and you lose that.
I would suggest that you consider passing on some of those questionable option deals, and get a signed purchase agreement only on the good ones. The ones that you know you'll find a buyer for. You should try to get in as light as possible. Quite often the seller will accept a small earnest money deposit with a quick close instead of more money down and a longer escrow period. If you're wholesaling, the properties will likely need extensive repairs, and won't qualify for traditional financing anyway. Your buyers will be finding the money to do the deal within a few days if they are really interested in the property anyway. Give yourself 30 to 45 days, and market it heavily. If you are buying right, finding a buyer will not present a problem that you can't handle.
Good luck,
Jeff
Thanks Jeff!
I will try it that way!
You've cleared some things up for me.
Thanks again,
Dana
greetings,
I am also wanting to get into option leasing but in canada... I want to go the route of getting motivated sellers to option thier property to me so that i can trn around and rent to own it... How do you go about approaching ppl with this sort of deal???
I am going to be dealing with the ppl who are trying to sll the house themselves "for sale by owner" so i can remove the agent and use my own to close the deal....
any advice would be great thanks
Kristian
Jeff, I am trying to do a similar deal with an elderly woman who is looking for another house to purchase. If I sign a purchase agreement with her, can I find another buyer for her property and have them buy it without the original buyer knowing what it sold for? I dont even know what this is called to search the archives. What paperwork is required and can I do it without a realtor. I am afraid if a realtor gets involved, I'll loose the deal. Thanks alot!
If you do not close yourself, then re-sell, most states require full disclosure. At least that's my understanding of the situation.