This is another good option to make some money. I can see if you find buyers that pay much higher price that your option price then it can be very profitable. I guess it is almost risk free if you put only $1 for option fee, right? What is the option time frame in general 3-6 months maybe?
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What I think are the main differences from l/o are that you have to find tenant buyer, no non-refundable option fee, and seller can look for buyers at the same time but you have 48 hours or so to exercise.
What contracts should I use for this, seller option to purchase and others.?
Posted by Nate Andree on February 15, 2005 at 18:32:13:
Hi all,
Does anyone have a simple form that can be used to secure an agreement with a seller of a MH for an option? I would like to try this out sometime. If I can secure an agreed purchase price with the seller, and find a buyer for that home at our agreed price I can get into one of these deals with little money invested. I would just have to pay an option fee (25-50 bucks) to the seller to keep that agreed price. If they sell it before I find a buyer, that’s the way it goes. If anyone has a simple option agreement please pass it onto myself. Thanks again for everyone’s advice lately. I will keep you posted.
Posted by Chuck (Texas) on February 16, 2005 at 08:54:19:
If your option contract is done properly there is no need for you to loose your option fee (25-50 bucks) or waste your time trying to find them a buyer. Have a clause in your option contract stating that the seller must re-imburse you a set amount (Ex. $100 - $500) to be released from your option. The amount is dependant upon the value of the property and what you can negotiate for. Have a clause that you get 48 hours to match any and all offers. Also, be sure to protect yourself in someway that your prospective buyer cannot go around you and purchase directly from the seller.
This is quite common practice in SFH, etc.
I am not an attorney, and this is not legal advice.
Good luck,
Posted by John (OR) on February 19, 2005 at 06:45:54:
Chuck,
I note that you said you are not an attorney and are not offering legal advice.
I also am not an attorney. I want to raise a point about what you are suggesting. I also acknowledge that you might have an effective market practice even if I am questioning if it would actually stand up in court.
An option is a unilateral agreement. It is binding in one direction. The person holding the option can decide when and if to exercise while the seller of the option lacks control over this decision.
What you are suggesting with extra clauses is really changing the agreement into a bilateral agreement that requires both parties to have responsibilities.
The point of all of this is you might have created a bilateral contract and not an option. The business purpose seems fine so I am only pointing out that you have a technically incorrect ‘option’.
If it really matters check with a lawyer as to if you need an option agreement, 2 options agreements (one for each direction) or a contract.
If you never go to court then the ‘option’ is more of a way to describe a deal and not a legal tool so you can just continue as suggested.
Posted by Chuck (Texas) on February 17, 2005 at 07:52:40:
What this thread is discussing is strictly a purchase option with no intention of yourself taking possession. Not a lease option.
You do not (& don’t want) to exercise your option to purchase until you find a buyer that has been first approved by the park. You are just placing yourself in between the seller and ALL buyers that the seller has not previously divulged to you in writing on the option contract and you have agreed to as being pre-existing. If you are working hard to solve the sellers problem, you should be rewarded. It may be a very small amount, but you are in control and is better than nothing. It should be a win-win situation.
The seller should have a time limit to protect themselfs from an eternal obligation to you.