Pure Option Strategy or Other...

[Propertymagnets 7]

Hello Forum Members;

I am writing to get some instructions on how to move forward with a pure option. The seller has signed the contract and I have 45 days to sell the home. It is a 4 bedroom/2Bath 1256 sq. ft. home, built in 1956. The seller needs to sell due to medical issues and is not willing to do a sandwich or CLO.

The seller says the home is free and clear, vacant, needs some updating, and is asking $47,000. It appears there is about $40,000 of equity in the home. I have checked Trulia and Zillow recently sold, finding homes sold for $90,000. I will gave my RE Agent run comps.

 

To protect my position would I use a Memorandum of Option or send the seller $10.00 to make me a principal in transaction? If the equity is $40,000, would asking $12,000 assignment fee to another buyer be unreasonable . Time of of the essence so a response from the brilliant minds on this site is greatly appreciated. I will keep you informed of the results. Thanks!

[MichaelC 160]

Charles, on paper you have a potentially good deal. Potentially, because until you dispose of it, it isn't worth a dime to you.

With that out of the way, the very first thing to do is confirm the FMV.

You say the seller has already signed the contract. I'm assuming you used the Pure Option Agreement, along with payment of a buck or five to make it legally binding.

Is the property listed? Is the homeowner actively marketing the property himself? Is your option exclusive?

[Propertymagnets 7]

Hi Michael,

 

I have my Real Estate Agent checking with MIBOR to get the FMV. Yes, I used the the Pure Option Agreement. The property is on Zillow as a FSBO. In my Pure Option Agreement I have a non-exclusive option for 45 days.

[MichaelC 160]

Since your option is nonexclusive you have no need to record a memorandum. Your primary concern should be marketing for buyers.

[Propertymagnets 7]

Thank you!