should I take a note as non-refundable option? - Posted by marla
Posted by marla on March 22, 1999 at 21:05:18:
After lengthy negotiations for the sale of a SFR on land to a developer, we’ve finally agreed on everything but the deposit/option_fee. The buyer’s offering a better than FMV price in return for my waiting 2-3 months longer than the usual 6-8 months for pay-off.
HOWEVER, he wants a free look-see for that period! He doesn’t want to have to come up with anything until after preliminary plat approval (~6-9 months) and then he wants to put up only a small promissory note. Neither of these is acceptable to me.
I’m looking for advise about whether or not to take a note secured by real estate (his or a partner’s) in lieu of a cash deposit, with the intent of selling it on the secondary note market if he backs out on the purchase of my property. (I’d just hold the note in escrow and execute it only if he backed out on the purchase.)
If I do take a note, how should I structure it for maximum appeal on the market? How much discount should I expect to give for a ~$60K unseasoned note? What else should I be looking at?
All advise/caveats welcomed!
Marla (Santa Clara, CA)