5 binary option trades taken on 27th july 201720 comments
Triple option trading 619 underground
Sign up for this week's free webinars hosted by experienced investors or view previously-held webinar recordings in the Archives. Are you a wholesaler, a rehabber, a landlord, or even a turnkey investor? View all Local Real Estate forums. I am thinking of getting started in REI by finding sellers, using an option to purchase agreement and then assigning that agreement to another investor for a fee.
I think I have a pretty good grasp on how all of that works, but I am curious about the assignment contract. Most of the assignment contracts that I have seen seem to be assigning a purchase and sales agreement.
Could I use these assignment contracts? Or is there a specific contract for assigning an option agreement? Also, any suggestions about where to find solid contracts would be a great help. Thank you in advance! Whenever you are assigning you are the assignor and the person you assign to is the assignee. You would first need to place a standard purchase contract in place with the seller, then find your assignee buyer.
The assignee is being assigned the terms of the original purchase contract you placed with the seller. It is pretty straight forward. Nathan straight forward wholesailing IF you need any pointers let me know. It isnt as easy as the Gurus say but it is real. Ok, im not sure I understand. So lets say I find a seller and I get them to sign an option to purchase agreement with me, then I find a buyer for the property.
From what you said it sounds like I would then go back to the seller and sign a purchase and sale agreement with the seller and then assign that to my buyer. Is that somewhat correct, or am I still missing something?
Establish a purchase contract with a seller at a price that is good for both of you. In this purchase contract, you have also established all of the terms. The assignment contract also indicates the "assignment fee", which is a number above the originally negotiated sales price with the seller.
You would not have it go back to the seller. Well what I am trying to do by using the option to purchase agreement is avoid entering into a purchase and sales agreement. The option agreement gives me the option to buy the house for an agreed upon price within an agreed upon timeframe, but does not obligate me to buy the property. If I have not found a buyer by the time the agreement expires we simply part ways and I do not have to purchase the property.
It seems to me that this is less risky than just entering into a purchase and sales agreement. I have a different perspective in that the Purchase Contract does the same thing you are looking to do. You can use the financing contingency as your out if you do not find a buyer. If you use an Option Contract it really says to the seller that you do not intend to close.
It sets a negative tone with the seller. I think that some people assume that if you sign a Purchase Contract then that's it, you have to buy the house. You can set the terms for as long or as short as you want. If a DD is not built into the Purchase Contract, then use an addendum.
Don't get me wrong, I use Option Contracts frequently. But this is when I tell the seller that I have no intention of buying the house and will find a buyer for them. When I use an Option Contract, I end it with a Termination Agreement that allows the funds paid to me to be shown on the Sellers side of the settlement statement. This is opposite of an assignment fee that is shown on the buyer's side of the Settlement Statement and is great if my buyer is using FHA financing or similar underwriting.
Interesting, I had not thought of doing it that way. I think I still feel a little more comfortable using the option contract just because I know that I do not intend on buying the property.
Thank you for sharing about the termination agreement, I will definitely consider using that. Or do you only use the termination agreement? I think there are several possible uses for an Option Agreement Nathan.
In my case, I use it to secure myself as well as the buyer. Before I can do my "official" Due Diligence and bring in others to help inspect the property, I have to tie it up first. This way, it protects myself, while I speak to contractors or inspectors about the property Yes, they also are looking for deals and will steal yours while "attempting" to be working to help you. I allow the seller to make a faux price they'd like to sell the property I'm not going to actually agree to that.
Allowing me time to "safely" do my due diligence with the prevention of contractors I work with to go around me. Now i typically don't do option agreements with everyone Most have already done their research and have a ballpark idea. Lock We hate spam just as much as you. If you signed up for BiggerPockets via Facebook, you can log in with just one click! Log in with Facebook. Full Name Use your real name. Password Use at least 8 characters. Using a phrase of random words like: Members Search over , members across BiggerPockets Companies Explore over 18, real estate-related companies Jobs Browse real estate job opportunities in your area Events Find upcoming real estate events and meetups near you Hard Money Lenders Pinpoint lenders near you with our nationwide database.
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Real Estate Forms Leases and other legal documents for landlords. Log In Sign up. Nathan, Whenever you are assigning you are the assignor and the person you assign to is the assignee. Nathan, This is a 2 step process: Free eBook from BiggerPockets! Download the eBook Now. Log in Sign up. Log in Email Password Forgot password?