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MikeT/NC

Calling Steve From NC

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Steve, I know since you're from NC you've had dealings with the L/O law of this state. I'd like to ask you how you handle a couple of things. Have you ever had a CA go sideways after you stepped out of the deal. How much do you school the sellers about their obligations per the State statures. I'm sure most first time land lords don't have a clue really what they're getting in to. Also there's one clause in the statutes concerning the option money. In 47G-2 subsection (B) item 5 minimum contents of an option contract it states that the option money and any other fees must be in the option contract. Well the option money you pay to the seller, ten $s or so, will be in the contract but the buyers option/assignment fee will not show up in the option contract. How do you handle this. Thanks, Mike

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Hey Mike!

 

Well, I talk about the Home Owner Home Buyer Protection Act about as much as I talk about Landlord/Tenant Laws. Both we need to follow as investors. I do have a disclosure with a brief summary of the law the seller signs, but it is up to them to get more detail unless they ask my non-legal opinion.

 

Regarding the option money, I put what I pay the seller in the option agreement and what the t/b pays in the assignment agreement. You could ad a line in the option agreement that states what the t/b pays, similar to the other t/b information that is added later, but it has not been an issue from attorney review.

 

As far as schooling the seller, I do want the best for all parties in the deal. I truly want things to work. But I am not an attorney and this is an Arms-Length transaction. Meaning I am not representing seller or buyer, I represent myself. So, for legal explanations the seller will need to consult a licensed lawyer. If I advise it could come back to bite. If I get a call later after the deal is assigned, I am even more exposed as I am not in the deal any longer. I may give an example of a similar situation I've had, but would recommend an attorney and give them a couple of attorneys they could contact.

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Thanks Steve, Did you ever get your real estate license? And do you still enter into a L/O with the seller and assign this to the buyer or are you doing it a little differently. I know some are never entering into a lease/option agreement with the buyer, instead they are just having the attorney created a lease option agreement between the seller and buyer and then have you just "release your option" for a fee.

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Mike, yes I have my RE license now and I am active with a firm. I will assign the deal if it is to tight to hold longer term. I may do a release with a SLO to stay in control thru closing. There are 10 ways to skin a cat, but the simplest is better.

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