Straight Option 'Song and Dance' - Posted by Doug

Posted by Mary in CA on June 06, 2005 at 13:09:59:

If I don’t buy you keep the option money?

I wouldn’t think that options would work very well with someone in a hot market who is set on selling, but rather with those who are waffling about selling (as in I don’t know if I want to sell, but if I get my price, I would).

Not exactly motivated sellers, but if you’re willing to bet on appreciation to cover the price at a later date . . . . maybe.


Straight Option ‘Song and Dance’ - Posted by Doug

Posted by Doug on June 06, 2005 at 10:36:24:

Hey guys,

I’m trying to put together a straight option offer for a $500,000 home (based on mls comps) in a gated community. I’m thinking to offer 450,000 on a 6 month option.

This will be my first straight option offer, and I’ve tried to put together a list of the advantages to the home owner vs. just listing with an agent. But to be frank I’m having a hard time selling myself. Most of the houses that have listed in that community seem to have sold within 3.5 months.

So far the ‘selling points’ like a fixed price, no commissions to pay, etc, seem pretty watered down to me. Like they would be really nice ‘side items’ to note, but the main reason to let my company option your house is _(blank).
Are there any advantages to selling with straight options that I’m forgetting?
Thanks for any insight!!

Re: Not a ‘Song and Dance’ - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on June 06, 2005 at 15:45:28:

It is a business transaction. You fail to mention how much ($$$) you will be paying this owner for the option. It is likely that he will want 5% or so for the option. That’s fair since you want him to just sit and wait on you for 6 months.

One thing that you are forgetting is that the margin of about 10% is too thin. How much do you plan to make? Something I hope.

Another thing is that the house may not sell, you know the bubble stories in the paper etc. So he will keep the option consideration in that case.