I have not seen a “good letter for options”. Typically options are something I discuss with a seller after I have determined that I can’t buy it cheap, or create some owner financing, or get a lease option. Only then does the subject of options come up.
In your example, YOU would want to option it from the seller at say $350k or less. Then you find a retail buyer at any price you will accept over $350k. You bring them to closing, at which time you exercise your option with your seller.
Does anyone have a good letter for options? What I mean is a letter you would send to, say, an expired listing that has been listed several times and hasn’t sold. You think you can get it under market (say FMV is $400K and you think you can get it for $350K and option it for the $400K) How do you word this in a letter? I have many of these I run across, but I want to make sure I word it right.
Re: I specialize in options - Posted by Lori Samson
Posted by Lori Samson on May 11, 2000 at 02:09:21:
Charity,
Ilove your name I had a daughter named Charity. I have an 8 year old named Faith and everyone asks me if I will have another one named Hope. Anyway… I am not sure why in your example that a house in that price range and hasn’t sold would be easy to unload on a straight option. I agree with the other posts about not trying to solicit buying it on an option by mail. When I am using expired listings as a means to locate I would always contact them personally. We have about 50 sandwiched leased properties and in all my experience I am unclear as to why you would want to do a straight option on it when it has that much equity in it, just buy it! Or, put a contract on it and flip it to another investor. I am not sure what an average home sells for in your area but in our area (Dallas) that is a high dollar house and is a narrow market for buyers. You have a lot of risk in doing high end properties on options or lease options. How long it was marketed for would be a big question to me in determining if I think I could find someone quickly or not to unload the house on. If your reasoning is to generate cash and no reasponsibility to it, then I recommend doing smaller lease option flips and then start doing lease option holds or sandwiched as some call it. You have a much broader market to buyers! That’s the important thing. How long I have to hold it determines what market I go into. We do some high end properties but it is too hard to find the buyer. I can open my front door and wisper the words “I have a lease purchase property for sale” and you better stand back for the hurd that is coming. If you go to junkie then it gets hard to move or if you go too expensive it gets hard to move. Lori
Re: Question for those who do regular options… - Posted by B.L.Renfrow
Posted by B.L.Renfrow on May 10, 2000 at 18:13:52:
Ditto the below post. In my view, the only way to propose a straight option to the seller is in person, at their kitchen table…otherwise they won’t have a clue what you’re talking about, and will automatically say no.
If you want to mail to expired listings, it would be better to just use a generic “I buy houses” letter or postcard. Then, if you have a potential deal on which you are unable to negotiate something better, that’s when you bring up the idea of the option.