Leaving the Option Consideration TBD until later?

[Kirc 0]

Hi;

 

I prefer to secure a home, locked up under contract with the seller, before lining up buyers. My intention is to collect the consideration funds from the buyer and assign interest, but this exit has the drawback of not knowing what amount to make available as consideration.

 

In this case can I simply write the option consideration as "To be determined" and then later attach an addendum that specifies the consideration amount?

 

Thanks

[MichaelC 160]

I'm not sure what you mean by "not knowing what amount to make available as consideration".

The amount of option consideration is noted on the CA Assignment Agreement. Where were you planning on writing "To be determined"?

[Kirc 0]

Hi; to clarify my post: since the amount of consideration I plan to put down depends on the amount I can collect from a buyer, and I secure buyers after locking up the house, I do not know the exact amount to write at the time of signing the contract with the seller. So I would like to write this amount later. (& I also prefer regular assignments to CA's so my fee stays confidential)

 

I hope that makes sense!

[MichaelC 160]

You seem to be combining two types of assignments in one deal, which causes the confusion you're having, Kirc.

If you want to do a straight option, then you must first secure the deal between yourself and the homeowner and have permission to assign the deal. When you sign the deal with the homeowner, that's when you will need to pay him the agreed to option money. Until then, you don't have a deal to assign.

Once you've accomplished that, then you can market for buyers and tenant/buyers and negotiate the assignment fee you will accept to sell/assign your interest. The better the deal you negotiated, the stronger position you're in to command an assignment fee. Generally, with a straight assignment, the assignment fee is only that: an assignment fee and it does not apply towards the purchase of the underlying property. In other words, it doesn't apply as option consideration as it typically does with a cooperative assignment.