another newbie q… - Posted by TW
Posted by TW on June 01, 2006 at 24:44:56:
This has rattled my brain for about a year now…
Every time I try to think about it, I get a headache…
I was listening to a Barney Zick CD – he had this great idea about ‘pure’ options (not lease option) – where you record a memo of option (to buy), etc. But you never take control of the property.
This idea was about how you could help someone STAY in their house by helping them with their bills, etc. IN EXCHANGE for an option to buy (say, within 3 or 5 years), where they accept your help ($$$) but agree to forgo all future increases in the house’s value (during the option timeframe). That is, the owner agrees to let you have the option to buy it at its present value, any time within the next 3-5 years.
Here’s the puzzling part – if the plan is to help the owner STAY in the house, how/when do they LEAVE the house?
In other words what’s stopping you (me) from selling their house from under them TWO WEEKS after they sign up.
Conversely, what’s to stop the owner from (merely) staying in the house forever?
I don’t understand how the owner + the option holder can BOTH benefit – and if so, WHEN (exactly)??
During the 3-5 year period, I’m gonna be triying to sell the house, yes? And the owner will be hoping I don’t, right?
The overall arrangement seems to make sense – but then… it doesn’t!
Help me out here, please.