zerggross 0 Report post Posted February 18, 2008 I got this seller who has a house in Toronto downtown area, very good area and a very attractive house (from pictures)the rent price is very reasonable.problem (always there) is he wants a bit down payment. the house is selling at 360k. Can i still do a CA or assignment with this? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 18, 2008 A CA is still a possibility. How much is the homeowner looking for? And how much option money can you realistically expect to receive for this house?If he insists on some money, first, it doesn't come out of your pocket. When you collect it from the t/b, that's when the homeowner gets his share.Secondly, you need to be firm with the owner to keep most of the option money in your pocket. Give it up grudgingly. Share this post Link to post Share on other sites
zerggross 0 Report post Posted February 19, 2008 A CA is still a possibility. How much is the homeowner looking for? And how much option money can you realistically expect to receive for this house?If he insists on some money, first, it doesn't come out of your pocket. When you collect it from the t/b, that's when the homeowner gets his share.Secondly, you need to be firm with the owner to keep most of the option money in your pocket. Give it up grudgingly. he wants 10k for initial payment, that's drawing close to 3%. If it's at that i can probably expect 5k for me, but i really don't have a good idea.never mind what he wants, what should be the bottom line for me? any suggestion? I've heard that some people get 3% for option money as a rule, some people try to get 5% depends on the market. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 20, 2008 10K option consideration for a property in that price range isn't too far fetched. 5% is on the high side these days, when buyers are calling the shots. If you're willing to do a 50% split, then follow up with this owner and see if he is curious or serious. If the latter, pin down some numbers and present him with a CA offer. Share this post Link to post Share on other sites
zerggross 0 Report post Posted February 20, 2008 10K option consideration for a property in that price range isn't too far fetched. 5% is on the high side these days, when buyers are calling the shots. If you're willing to do a 50% split, then follow up with this owner and see if he is curious or serious. If the latter, pin down some numbers and present him with a CA offer. thanks michael. but back to beginner question again, I understand how Sandwich lease and assignment works. It's all pretty obvious. but i fail to see how a CA contract protect my interest. I mean the option to purchase agreement has option fee in there, and I was not to pay that option fee upfront. so the L/O contract is not valid until somebody pay it. Does that mean the buyer can still sell the house while i was out looking for a T/B? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 20, 2008 Both the CA Residential Lease Agreement and the Option to Purchase Agreement would be completed between you and the homeowner. Pay the homeowner $1 or $5 and note that on the Option tol Purchase Agreement. You now have a legally binding contract which the homeowner needs to adhere to.Then, when you find the t/b you complete the deal with the CA Assignment of Agreement. Share this post Link to post Share on other sites
