Hi,
I recently found someone that wants to sell some land (not listed, no agent) at X amount of dollars, which is below market value. I was hoping to approach a potential seller and sell it at XX and make the difference. My question is what can I do to protect myself so that the seller can't go over my head once he has the section 32 as I don't know the seller very well. Is there a legal contract can I use, so that I don't actually use any of my own money for the purchase? I've heard of the term 'call option' but don't know much about it, could something like that work?
thanks in advance for your help
Paulyp
Hi Paulyp
The challenge with a traditional option is that the final purchaser usually finds out what you optioned the property for. If you're looking for an easy sale, you need to be able to give your final purchaser a standard contract of sale, not an Assignment of Option form (as with a standard option).
We use a system of legal paperwork that prevents the final purchaser knowing what price you're controlling the property for, i.e. it's an option but it's very different from a traditional real estate "call option".
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Paul D, are you referring to the use of a Put & Call Option? ie something which is quite readily available thru any conveyancer?
Hi Scott
No, it has no "put" component to it. It's just a "call" option that we've modified significantly because, when we first started doing these transactions, we were frustrated by both the vendor and the final buyer seeing the complete transaction.
We figured that we'd negotiated a price that the vendor was happy with and likewise, the final purchaser, so why should we use paperwork that makes our profit completely visible to all concerned. This is pretty much like investors who undertake "flips". They don't want their "purchase" and "sell" prices disclosed to the other parties.
With this in mind, we utilised the services of two law firms to end up with what we finally wanted and it works for us. Thanks.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul D,
thanks heaps for that, thats exactly what I need. If at all possible would I be able to give you a call? Regarding the options and wrap training JV's. If it's o.k Just let me know what time would suit you best.
Cheers
Paul
Hi Paul
Feel free. Anytime is fine.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
