Assignment of option: how to protect my interest? - Posted by B.L. Renfrow
Posted by B.L. Renfrow on May 07, 1999 at 19:44:48:
First, let me say as a relative newbie that this board is one of the most valuable resources I’ve come across. I probably spend too much time reading it when I should be out looking for deals!
Here’s the question: I’ve gotten options to purchase on a couple of properties so far. I’m looking to sell the options. Now, maybe I’m spending too much time thinking about all this, but what’s to prevent a potential buyer from looking at the property, then just waiting until my option expires, and going to the seller and making his offer directly, thereby cutting me out of the deal and saving himself my option assignment fee? I discussed this with my attorney, who suggested I draw up and have any potential buyer sign an agreement (prior to showing the property) in which the buyer agrees that if they purchase, lease or take title to the property subsequent to the expiration of my option, they are obligated to pay me a fee of $2000 (or whatever). Well, I tried this, but found that it irritated the potential buyers to such a degree that I stopped doing it.
I’m curious how others handle this. Any comments/suggestions are most welcome.