Got an Option, and a Buyer - How to proceed? - Posted by RE King

Posted by Kristine-CA on September 19, 2004 at 23:10:30:

RE King: well, first off: what does your option agreement say about exercising your option? Does it have language that specifies how you (buyer) will either go into a contract or have the option contract turn into a purchase contract?

My understanding from your post is that, no, you cannot agree to sell the property as the buyer, because you are not the owner. All you have to sell is the option.

Secondly: if you can’t do a double close, have you checked with a closing/escrow agent to see how they can help you to get paid at closing. Sounds like your buyer is using lender funds–so you may have to check into how to put your option price/fee onto the HUD-1 to make it fly. But if you explain what you want to do to the closing agent, you should be able to figure it out.

Regarding double closes: my experience is that if you are very clear with the escrow people that you agree to two escrows and two sets of fees that they will allow it. However, I have been required to disclose the double to everyone, which hasn’t always been easy. It definitely brings us the issue of profit, especially for the seller.

If it were me, though, I’d look for a buyer that either has the cash to pay me off at the time of assigning the option, or for one that has other property to collateralize a promissory note until they get cash back at closing or can re-fi.

Just my opinions here. Sincerely, Kristine

Got an Option, and a Buyer - How to proceed? - Posted by RE King

Posted by RE King on September 19, 2004 at 18:22:26:

Never done much creative real estate in the past, just paid cash, rehabbed, and sold for cash(buyer got mortgage…)

Anyway, got an option on a property worth $300k at $223k.

Got a buyer for $256k.

Can’t sell the option for $33k, buyer isn’t putting that much cash into the deal.

If I have an option, can I sign a purchase agreement with a buyer even though I’m not the owner? Or do I have to get the owner to sign a purchase agreement with the buyer and have the owner pay me a consulting fee for the difference?

I’d like to do it one of the two above ways because double closings are hard to get a title company to do in my area.

I’d appreciate an answer to that purchase agreement question regardless please for future reference.


Re: Got an Option, and a Buyer - How to proceed? - Posted by Paul

Posted by Paul on September 20, 2004 at 11:51:03:

How about signing a Purchase and Sales Agreement with the seller direct that contains an assignment clause.You can then assign it to your buyer, thus eliminating the need for a double close or any additional fees.