February 4, 2017 at 2:44 pm #7989
Daniel BearParticipantFebruary 4, 2017 at 2:44 pmPost count: 42
The education packet mentions a separate education package on “Optioning”. I am wondering what material is being referred to here and where can I find it?
– Daniel B.
Joe SchmittParticipantFebruary 24, 2018 at 10:03 amPost count: 108
I’m looking for this too. Did you ever find it?Kevin FarrellModeratorFebruary 24, 2018 at 12:28 pmPost count: 967
Joe and Daniel – I am not aware of a training program from J&J on optioning.Joe SchmittParticipantFebruary 24, 2018 at 1:02 pmPost count: 108Kevin FarrellModeratorFebruary 24, 2018 at 1:39 pmPost count: 967
Joe – Like I said, I don’t believe there is one. I have not done an option so I am not an expert. I would do some Google searching and find someone who is an expert. Also, several people on this forum have done options and can help you.
I understand it in principle but I don’t have experience or a contract to share.Anwar MontgomeryParticipantFebruary 24, 2018 at 9:16 pmPost count: 97
Pretty confident there isn’t a whole program on Optioning.
Nonetheless, here is a link where you can get a copy of the option agreement.
Download it and adjust it with your own info, unless you want me to get your options 🙂Luke SmithModeratorFebruary 24, 2018 at 9:55 pmPost count: 1262
Options are great tools. Mail out offers and people say that’s too low I want… Say ok your property is special because…. It must be worth more than I am buying these others at. Why don’t you let me market it for you. I got people out looking at all this other land of mine they might as well go look at yours too. We get the right buyer I’ll do all the paperwork and send it over with the money you deserve for your special land.
It doesn’t sell. Say everyone wanted the cheaper ones instead can I try a lower price. Month after month until it sells or they give up. Sometimes they sell first and it was special land.
Just ask them for and agreement. Option sounds scary.
Let me take care of it for you. Provide them with a service and don’t call their baby ugly. When you do that it’s easy to land options. Got one guy with over 500 properties to do a multi year option so I can sell them one by one. Just got to ask for what you want.Anwar MontgomeryParticipantFebruary 24, 2018 at 10:13 pmPost count: 97
Options are awesome. Def a great tool. Get comfortable and confident with asking for it. Like Luke said, definitely don’t call the baby ugly. Make it more about you not being able to swing it at the moment. Be careful of the wording though. Not sure if I would tell them I’m going to market it for them. You don’t want to appear that you are representing them in the sale of their real estate. You then become a real estate agent/broker practicing without a license. Silly stuff, but all it takes is one person to feel a certain way, tell the Attorney General or whoever they tell, now you’re being investigated. I am under investigation now with the state of Minnesota because they are looking into if I was doing real estate dealings as an agent without a license. I completed every transaction with cash so I should be good but they were concerned with an option. So be careful.Luke SmithModeratorFebruary 24, 2018 at 11:08 pmPost count: 1262
Very true @anwar make sure you get your price set. Tell them they get that much. You get the rest.Jason CochardParticipantFebruary 25, 2018 at 11:12 pmPost count: 53
Options are really effective risk-killing financial time machines, letting you sell before you buy. In an imperfect market like real estate, they’re financial rocket propellant.
Here’s mine: https://docs.google.com/document/d/1RuK_pbzdJJ1Gw1MR2c5gpqaoN_5whZHBqf23E_37XQ4/edit?usp=sharing I grabbed an option off the internet and tailored it to my situation. The key is that it names the parties, describes the asset, has a purchase price and an expiration date. Some people don’t, but I also follow the practice of including an option premium of $10, which is the non-refundable price that makes the contract binding in traditional common law.
Sometimes it backfires and someone wants $5k option premium (for their special land), which is when I tell them there are two choices: burn the pages one at a time to maximize burn time, or burn them all at once to minimize burn time.
They’ll come back if they really want to sell.
I agree with Luke that you might want to avoid the term “option” with sellers, because they might misunderstand and go into a google-fueled tailspin of internet research failure. In one case, a seller thought I was talking about a Lease Option Agreement, and he almost backed out of the deal because he thought I wanted to rent-to-buy. I was surprised that he didn’t understand because he wrote emails with really proper “legalese” language and diction, so it seemed like he knew, but he didn’t. That gave me an insight — people know real estate is a serious business with potentially a lot at stake, so their guard is up really high especially when they don’t understand everything. I get faxes back from offer letters where people cross out all the action verbs and write in the opposite word, cross out the date, etc, to create some kind of legal trail that they rejected my offer. It’s not necessary because the offer will self-destruct at the expiration date anyway, but they do it anyway because their guard is up and don’t know what to do.
Even if they do want to sell, their guard is still up, and to keep up with what you’re talking about (at least when it’s over email), sellers might just google whatever term they don’t understand and reply with what they learned after 10 minutes, even if they read about the incorrect thing. Since lease options are more common than options, that’s what this seller thought I was talking about, and it almost killed the deal.
I think most sellers understand that we’re here to flip land, and I’m not currently worried about them knowing that I’m going to immediately market their property and close after I find a buyer. If you take one look at any of our sites (like sellers do), you’ll be able to add up what we’re doing. From the seller’s perspective, they just want it sold, so if you’re out of funds and offer an option to get into the chain of title, One seller told me, “I believe in capitalism and $xxxxx is all I need — I know you’re gonna sell it and if you make $50k on it, I’m happy for you.” I wish more sellers were like that guy, and I hope he has the same attitude when it sells.
You must be logged in to reply to this topic.