Straight Options - Posted by Demetrius

Posted by jeff on July 07, 2002 at 18:31:28:

#1. your option is recordable just like most any other type of real estate agreement. you can either record the option or a memorandum, that is your decision. both serve the same purpose. there are reasons to do a memorandum instead of the actual agreement for paper size, number of pages, or other obstacle that is not a standard setup. but either will do just fine for recording.

#2. the memorandum is a seperate document, you are correct.

#3. anytmie anyone signs their name to a legal document that you intend on recording it MUST be notarized during the signing of all parties included in the document. this can be done at the same time or seperately as the case may be, but the notar must actually be present during the signing of the name that they are to be notarizing. all documents that are to be recorded have to be notarized. they are still legal without notarization, just not recordable, in my area anyway.

#4. in most cases the realtor has an exclusive listing agreement and can battle you against your option rights. if he finds his buyer and you have not actually exercised your option then the realtor is gonna hit a clouded title once they try to close the deal with their buyer. your RECORDED option is a cloud on the title and must be cleared up before the sale can happen. all they have to do is wait out yuor time frame or the realtor can claim his exclusive listing and battle you over your option legalities. yuo will probably lose this battle if you havent exercised your option yet and are just waitnig out your term. your option is just that, an OPTION. it is up to you to exercise it or not. noce the realtor gets his buye rlined up you need to decide if you intend on exercising your option and purchase the property or not. yuor option is prevalent to the realtor’s buyers since you have the right to buy the property already recorded. but my guess is, and this is just a guess since i dont do options usually, the realtor will object to you holding them back from making a sale on a property they have an exclusive listing on. ive never dealt with this situation, but id imagine at this point youd better exercise or release the option or the realtor will make your life hard from this point on.

again, i do not do options as my normal course of business but this is my best interpretation of the goings on with this setup.

Straight Options - Posted by Demetrius

Posted by Demetrius on July 06, 2002 at 19:49:42:

How does one do an option on a house that is listed??How do I get around the realtor to do an option.Does the house still remain on the market while my option is active? If so, do I still record a memorandum???

Re: Straight Options - Posted by jeff

Posted by jeff on July 06, 2002 at 19:55:47:

the house does remain on the market during your option period. the realtor has to be paid if you exercise your option during the listing agreement time frame. you can work out a deal with the realtor if you can offer him better terms or something than your option purchase will give him. good luck in accomplishing this task, but it is conceivable if your offer is good enough and the realtor has enough trust in you to accept your offer.

your best shot in doing a deal with creative terms is to not offer this setup to a realtor but to the homeowner themself. realtors dont like our reative terms, they like a check made out to them at the closing table funded by the buyer or the buyer’s lender PERIOD.

your option is recordable. recording is a good idea to protect your interest in the property just in case the realtor gets a sale before you do.

Wait a minute! - Posted by jerry

Posted by jerry on July 07, 2002 at 18:12:35:

Wait a minute! Just when I think I understand something, someone comes along and counters it. #1: Is an option recordable or is it a “memorandum of agreement” that you must record?

#2: Isn’t the memorandum a separate document?

#3: Does the seller, buyer or both sign this document in front of a notary?

#4: What happens in the above scenario you mentioned where the realtor gets a sale before you do? Is this just a right of first refusal that you have or an option? If I have an option to buy a property for 100k for the next 3 years and the realtor sells the thing tomorrow for 100k what happens in your scenario?