Legality of Straight Options?? - Posted by DougW

Real Estate Investing
1

Posted by Staci on March 04, 2002 at 09:10:17:

This is excellent advice, houserookie ( Austin and TC )

How much in closing fees can you save by doing this way?

TC, you said you always use Land Trust in all your deals in a double closing. Can you please elobarate? Why would you need to double closing on a land trust when you are not buying from the seller?

If you are charging a management fee, then you’re the manager of the trust or trustee right…and not a buyer.

Thanks

Staci

2

Legality of Straight Options?? - Posted by DougW

Posted by DougW on March 02, 2002 at 06:10:38:

Does anyone have any experience in doing a straight option to purchase with homesellers? My concerns are : is this essentially practicing real estate sales without a license?
I know there are obvious differences in that I am buying the house at a double close. However, I am curious if others have had any success using the straight option technique.

Thanks

DougW

3

Re: Legality of Straight Options?? - Posted by Mike Daly

Posted by Mike Daly on March 02, 2002 at 07:30:57:

There’s nothing illegal about it at all – having an option gives you an interest in the property, so you don’t need a license.

By double close, do you mean a simultaneous closing? This isn’t necessary, you can just assign your contract to your buyer and get an assignment fee for the difference. The only time a simultaneous closing is necessary is if the buyer’s lender requires that you be in the chain of title, or if you don’t want the buyer to know what your option price is (which could kill the deal if it’s pretty large.)

Mike

4

This is BAD advice. - Posted by Houserookie

Posted by Houserookie on March 03, 2002 at 20:30:44:

A simultaneous closing is almost a necessity unless you don’t mind buyers going around you…and deal with sellers directly.

Get straight with the seller with a purchase contract subject to “financing” or do an option to purchase.

I’ve come across many deals where assignment fees are just not enough.

Another method is to use a land trust to control properties with me as trustee. I then sell the property and seller agrees to pay me trust management fees…which can be agreed upon in advance.

Austin

5

Re: This is BAD advice. - Posted by TC

Posted by TC on March 03, 2002 at 22:51:09:

I have done a option (Double Closing) before and made 16k (Always use a Land Trust) and have another in the making but I see that you could save on the double closing fees if you went the Land Trust route with the management fees you are talking about.Could you elaborate a little on the details.Do you file a Lein or a Memoradum or is it written into the Trust or maybe just a written agreement outside of the Trust.
I like this idea and would like to use it if I understood it a little better.

Thanks!

TC