Straight Option- What is it?
The option is a great way of selling and buying a real estate property. In this the seller sells the property to the buyer who in turn markets the property till he or she gets the property sold. The seller is then paid the price of the property by the buyer. The buyer here gets to have the profit that is the difference between hi buying and selling the property. The main advantage of this kind of agreement is that the seller is technically bonded by the option while the buyer is not but if the seller finds a buyer before the optionee does then the seller is released of any bindings there and then.
Advantages of using straight options
- The seller does not need to market the house
- There is no tenant
- The seller straight away receives cash on the sale of the property
- The sale is quick
- The buyer has no risks of capital as nothing is going from his pocket
- The more the price of the house the better are the gains
- If you are a novice in the field you get an idea of how the buyin and selling of the property takes place you get the feel of the market and you can decide if you really want to enter the market.
- There is no commitment that you have to make for a very long time. You have option to back out at any point in time.
Where to download Straight Option Template?
Sample Template Preview
Option To Purchase Real Estate
THIS OPTION is made and entered into this ______ day of ___________ 20______ by and between ___________________________________________________ hereinafter referred to as “Optionor,” and ____________________________________________________________ and/or assigns, hereinafter referred to as “Optionee”.
WITNESSETH, that for and in consideration of $______________________________ and the mutual promises and covenants hereinafter set forth, the parties hereto agree as follows:
1. Option to Purchase Real Property. Optionor grants unto Optionee the exclusive right to purchase the real property described exhibit “A” annexed hereto.
2. Term of Option. This option shall commence on __________ 20_____and expire on _____________, 20____.
3. Terms of Sale. The terms of sale shall be: _______________________________________
The following items shall be prorated at closing:
All personal property, appliances, attachments and fixtures shall be included in said sale except:
The Optionor shall convey title by a good and marketable _________________ deed and shall furnish a policy of insurance from a reputable title insurance company.
4. Extension of Option Period. Upon payment of $_____________________, Optionee shall have the right to extend this option by ______________years under the same terms and conditions.
5. Notice of Exercise. This option may be exercised at any time during the option period as described above, and Optionee may exercise said option with or without notice to Optionor.
6. Escrow of Closing Documents. All documents necessary for title transfer, including, but not limited to a warranty deed and bill of sale, shall be executed and held in escrow with an escrow agent of Optionee’s choosing. Optionor shall execute a deed of trust or mortgage in favor of Optionee to secure performance of this agreement.
7. Insurance. Optionor shall protect Optionee’s interest by maintaining hazard insurance upon the property, naming the Optionee as additional insured. In the event of destruction in whole or in part of the property, Optionee shall have the option to proceed with the closing and accept the insurance proceeds for said damage, or to declare this agreement null and void, releasing both parties from any obligations hereunder, except for the return of monies paid by Optionee which shall become immediately due and payable from the insurance proceeds.
8. Other Encumbrances. Optionor representing that the following liens and encumbrances
currently exist on the property:
Optionor covenants that he will not further impair or encumber the property without Optionee’s express written permission. In the event Optionor defaults on the payment of any of said security instruments, Optionee shall have the right to cure and/or satisfy said security instruments, and, in this event, shall be entitled to a 18% interest on actual expenses incurred in doing so.
9. Assignment: Optionee shall be permitted the right of assignment of this option.
10. Agreement Binding. This Agreement shall be binding upon the parties hereto and their
respective heirs, administrators, successors, and assigns.
11.Governing Law. This agreement, and all transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the laws of the State of ____________.
In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party’s reasonable attorney’s fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written.
On ___________, 20 ___ , before me, _________________, a notary public in and for said state personally appeared _____________________________, personally known to me (or proved to me based upon satisfactory evidence) to be the person(s) whose name(s) are subscribed to the within instrument and acknowledged that (s)he/they executed the same in his/her/their signature on the instrument the person(s) or entity on behalf of which they acted, executed the instrument.
Signature of Notary NOTARY SEAL
My commission expires__________
EXHIBIT “A” – Legal Description of Real Property
- Affadavit & Memorandum of Option 1 Party Agreement
- Affadavit & Memorandum of Option 2 Party Agreement
- AFFIDAVIT OF OWNERSHIP-Options
- Assignment of Option Agreement
- Loan Authorization
- Mortgage Broker Submission-option
- Notice of Intent to Exercise Option
- perf mortgage addendum-option
- Release of Option — MUTUAL RELEASES-Options