Property Option purchase

Viewing 5 posts - 1 through 5 (of 5 total)

paulthemagnet
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@paulthemagnet
Join Date: 2003
Post Count: 27
July 29, 2003 - 11:32 pm
Hi Guys,
Anyone heard about buying property on option?.
Can someone please comment on this?
Ta, Paul
Harold
Member
@harold
Join Date: 2003
Post Count: 80
July 30, 2003 - 12:20 am
Paul, tell us more about it. Are you buying it off someone else who has already negotiated option or are you negotiating option to sell to someone else.
I’m almost a lawyer and my best friend is a lawyer and we are looking to put together some ‘option’ deals on property. I suppose its a no money (little money) down option for selling property
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
July 30, 2003 - 3:05 am
Purchasing an Option on a property is very common with Developers. One of my clients had a developer purchase an option on her property. He then went am purchased options on all 10 houses in that block. Once he had options on them all, he then submitted plans, DA etc to council and got approval to build a huge block of units.
The good things about options are they give you the right to back out. The purchaser has the obligation to sell you the property, but you have disctretion on whether you actually purchase.
You can also sell your option to someone else. eg negotiate a good deal, sign up the seller on an option so that they cannot back out, and then find someone to sell the option to. It may even be possible to not pay stamp duty by doing this.
Terryw
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
paulthemagnet
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@paulthemagnet
Join Date: 2003
Post Count: 27
July 30, 2003 - 3:33 am
Thanks Harold and Terryw,
I saw a house for sale through a local agent. It says option purchase allowed. Not sure what they meant. Didn’t want to ring up the agent to find out either.
In the meantime, does the ownership change? So basically anyone can approach any house owner and offer them an option to purchase. I presume the price will be higher than the market price.
Ta, Paul
davidfemia
Member
@davidfemia
Join Date: 2003
Post Count: 89
July 30, 2003 - 5:48 am
Hello Paul,
Options are generally granted through developers, whilst the property is being built. Ownership doesnt change until settlement.
The form simply entitles you to buy the property at the set price. It is essentially reserved for you, but is not a contract to buy.
As these are issued early on in the development propcess, you will find at times that the property can be purchased at a cheaper rate. By the time completion is close, the value can rise.
You will also find that you can on sell options if need be.
David Femia
Femia Property Group
Property Investment Consultants
http://www.femiapropertygroup.com.au