#1investor_cream 5 Report post Posted May 31, 2012 I spoke with my lawyer today about pure options. Lawyer with over 30years of Experience is telling me that I can't Contract a property even if it's a Option to purchase agreement without deposit money in Escrow. Even If I wanted to assign, or double close I need to have a Escrow Deposit to have total control of the property to market and re-sell. What are your thoughts? Is this lawyer someone I should be working with to handle my Deals? I hear many stories of No Money down deals. Or even people having their buyer place the money for deposit but if that's the case you don't have a contract because the option or purchase agreement is not binding. I'm a little confused here. For Example : Seller wants 100k - Comps come in 150k - 185kI contract the property for 100k with a option to purchase my plan is to sell the property for 120k20k spread. what's next after I have a few buyers in mind that would purchase this property in a heart beat Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 31, 2012 Lawyer with over 30years of Experience is telling me that I can't Contract a property even if it's a Option to purchase agreement without deposit money in Escrow. Even If I wanted to assign, or double close I need to have a Escrow Deposit to have total control of the property to market and re-sell. What are your thoughts?I disagree. Why then, after doing these deals for almost 20 years, hasn't another attorney raised this issue? Not a seller's attorney, not a buyer's attorney, not a lender's attorney, nor the title company's legal counsel? I'm not an attorney, but in my experience I've never needed to place deposit money in escrow. Meet with another attorney, preferably one who is also a real estate investor. I suggest you attend the local REIC and speak with several members. I'll bet you hear differently. 1 Share this post Link to post Share on other sites
ErikOk 10 Report post Posted May 31, 2012 How about asking him to show you the law? Share this post Link to post Share on other sites
ErikOk 10 Report post Posted May 31, 2012 I guess if it comes down to it you could put $1.00 in escrow Share this post Link to post Share on other sites
bwalston 1 Report post Posted May 31, 2012 IMHO, your lawyer is dead wrong. Why would you need a deposit in escrow if you have only the right, not the obligation, to buy? Now, there are some states that require 'consideration' for the option. I use the old 'for $10.00 and other good and valuable consideration' clause...it seems to cover most situations And no, I don't think this is the attorney that should be closing your deals. By the way, if he continues this nonsense, ask him to show you the statute, rule or reg that requires a deposit in escrow in order to have a valid assignable option. Share this post Link to post Share on other sites
ErikOk 10 Report post Posted May 31, 2012 IMHO, your lawyer is dead wrong. Why would you need a deposit in escrow if you have only the right, not the obligation, to buy? Now, there are some states that require 'consideration' for the option. I use the old 'for $10.00 and other good and valuable consideration' clause...it seems to cover most situations And no, I don't think this is the attorney that should be closing your deals. By the way, if he continues this nonsense, ask him to show you the statute, rule or reg that requires a deposit in escrow in order to have a valid assignable option. He's a lawyer, he must be right Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 31, 2012 He's a lawyer, he must be right Of course. Just ask Senator John Edwards. Share this post Link to post Share on other sites
ErikOk 10 Report post Posted May 31, 2012 He's a lawyer, he must be right Of course. Just ask Senator John Edwards. Do you think they will acquit? I bet they make him pick up aluminum cans on the road. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 31, 2012 He's a lawyer, he must be right Of course. Just ask Senator John Edwards. Do you think they will acquit? I bet they make him pick up aluminum cans on the road.I'm going with a hung jury. Let the fun and games begin anew next year. Share this post Link to post Share on other sites
#1investor_cream 5 Report post Posted May 31, 2012 you see this is the confusing part.. I need to know the Closing process. Once I have contract between me and the seller with the pure option contract then I have the buyer sign an assignment agreementthen explain the process of closing, due diligence period, this is not a double close the title company pays me a check for basically cancelling my contract with the seller. But How do I tell this to an attorney that owns a title company. I need some help hereI'm sitting on a bunch of deals. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted May 31, 2012 Is there any reason you have to work with this particular attorney and title company? If not, shop around for someone who understands what you're wanting to do and who can accomodate you. Again, contact some of the many Miami/Dade based real estate clubs. I'm sure they can help. Share this post Link to post Share on other sites
bwalston 1 Report post Posted June 2, 2012 you see this is the confusing part.. I need to know the Closing process. Once I have contract between me and the seller with the pure option contract then I have the buyer sign an assignment agreementthen explain the process of closing, due diligence period, this is not a double close the title company pays me a check for basically cancelling my contract with the seller. But How do I tell this to an attorney that owns a title company. I need some help hereI'm sitting on a bunch of deals. In order to close like this you probably should be using a RELEASE and not an ASSIGNMENT. Check out this thread. It should answer some of your questions. Share this post Link to post Share on other sites