Posted by Tom on September 25, 2001 at 01:14:19:
You need to do a lot more study. An option to buy is just that, and option to buy. No transaction has taken place (except sale of the option). On a contract sale, you have bought the property and are obligated to meet the terms of the contract.
Option to buy vs. Contract - Posted by Kim E.
Posted by Kim E. on September 24, 2001 at 23:15:21:
I need to ask a few basic questions.
When do you tie up a property with an option to buy, and when do you tie it up with a contract, or are they the same?
How long do I tie it up while I am trying to find someone to flip to? How much money do I fork over to do this? If I can’t find someone, which should not be the case if I’ve done it correctly, what are the consequences? Do I just put in my ‘weasel’ clauses to protect me?
I’ll be speaking with an owner of an 8plex tomorrow and I want to have a better handle on this.
Thanks for your help.
A little more detail - Posted by Bud Branstetter
Posted by Bud Branstetter on September 25, 2001 at 09:34:49:
Let first comment on mechanics. An option would be a longer term agreement. It can be notarized and recorded. A contract can have weasel clauses such a earnest money being the only recourse against default. Or subject to inspection. If your seller is on the ball he should have counter measures to those clauses. I have one(owner financed) that is due this week in which I asked for and recieved a $2000 non-refundable consideration for a sixty day option until they came up with the rest of the down payment.
Either way, I think what the others were reacting to was your statement that you were going to tie it up until you found someone to flip to. Some sellers may let you do it, but is it fair to take it off the market. I don’t like to contract with someone unless I feel I can perform. There are situations where I will option it or fill the contract with those clauses but the seller will know that I do not personally intend to buy.
Re: Option to buy vs. Contract - Posted by Doug (ON)
Posted by Doug (ON) on September 25, 2001 at 08:26:04:
I agree with Tom that you need to devote much more time to studying REI.
Let me put it into perspective:
Would you perform brain surgery without going to medical school?
The questions you’re asking about REI are akin to:
“What’s a scalpel?”
“Where’s the brain?”
Doug