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  • #2328
    Troy
    Participant
    Post count: 31

    Hello Everyone,

    Section 8.3 of the course reviews the concept of an Option. (Buying with Zero Down) I have a couple questions about the Option Agreement, and hoping for advice / input from the members on my questions below:

    The Option Agreement – Item 2 states: “2. For good and valuable consideration of the, Seller grants to ST the exclusive right and Option to purchase the property upon the terms and conditions set forth herein.”

    This statement in the Option Agreement within the course seems to be missing some words after the opening phase “For good and valuable consideration of the,…” As I read that I find myself asking: Of the, what? Is there a part of this sentence that is missing after the comma?

    Also, there is no mention of actual “option money” given to the seller for the Option to Purchase, so I was wondering if the members typically give any option money in these land deals? $10 o anything to secure the Option?

    Anybody else with experience with Option deals, please share….

    Thanks, Troy

Viewing 6 replies - 1 through 6 (of 6 total)
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  • Aaron Sauceda
    Participant
    Post count: 60
    Pro

    @jilldewit @admin @luketsmith

    Bumping this thread — I’m curious for the same. What consideration do you offer for option deals? I’m hesitant to put too much at risk of losing it, but hesitant to put too little so the seller balks.

    Luke Smith
    Moderator
    Post count: 1263
    ProAdvanced

    I just offer my sales service. They want more money all they have to do is give me the shot. Sign the contract I’ll market it the best I can and try my heart out at getting their price. Everyone wins. They don’t need your money just ask for a short amount of time and renu it later if you think it is worth it.

    Jill DeWit
    Participant
    Post count: 439
    ProAdvancedStaffPrincipal

    I’m on the same page as Luke, @aaronsauceda. If they are really anxious to sell, they can accept my cash offer now. If they want to hang out so I can try to get more to make their deal work, then we go that route. I never give them anything up front.

    Aaron Sauceda
    Participant
    Post count: 60
    Pro

    @luketsmith @jilldewit

    Thanks for chiming in. The reason I bring it up is twofold:

    (1) Based on what I’ve read, in order for the contract to be valid and enforceable, there must be some form of consideration. I was under the impression it must be something of monetary value.

    (2) In the Option contract in the Cash Flow from Land package, there’s a line that reads, “For good and valuable consideration of the, Seller grants..”

    It says “valuable consideration of the” and then there’s a comma, as if we should be adding some sort of consideration there. Do you typically leave that verbiage as is, or write something after “the”?

    Luke Smith
    Moderator
    Post count: 1263
    ProAdvanced

    I’m not begging them to do an option contract that is my backup after my low ball cash offer did not work but they still called. I should be sticking with the cash offer and moving on but I am greedy so I settle for the option contract. When we are in that scenario it is like the sellers are just so happy I will try to get them the money they promise, beg, thank and everything else positive you could ask for. They don’t ask for money from me as consideration. We are not talking to real estate agents here that are talking to the sellers and making sure they go for the big earnest money or option payments to cover their fees.

    As for the is it legal or not? I got a contract with a seller that says they will sell at X to me in so much time. That is a legal contract. The rest is more like what degree of legal and how enforceable?

    Maybe it is more enforceable if you pay something? Maybe not? Not my area to know. I don’t ever plan to take one of these to court to find out.

    Sounds like a big waste of time when I could be doing other deals.

    Put it in a company. Ringfence your assets from one another with multiple entities and relax.

    Ron Mayfield
    Participant
    Post count: 68
    Pro

    All valid points Luke.

    Would still be nice to hear from Jack or Jill on the intent in that contract….as for me (and I don’t even play an attorney on TV)…I drop the “of” and it reads “For good and valuable consideration, the Seller grants to ____ the exclusive right and Option to purchase the property upon the terms and conditions set forth herein.”

    As Luke said, it may or may not be binding but who’s going to take a seller to court over it unless it’s a huge deal

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