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Commonly Asked Questions About Real Estate Options

Are you aware of the fact that there are real estate options that you can use in order for you to have some legal control over valuable properties? Do you also know that these properties can help you earn more income even if you only have a small amount of money? As a real estate investor, be it old or new, you should understand these options in order for you to succeed in the real estate industry.

In order for you to benefit the most from your real estate options, you have to be familiar with the method and how it works, while following your local state laws. Once you are able to do all of these things, there is n doubt that you can get the most returns out of your real estate investments.

This short article will give you some commonly asked questions about real estate options and what their corresponding answers are.

1. What is a real estate option?
The first thing that you have to know about real estate options is that they are a unilateral agreement. This agreement must be made between the optionor that is the seller and the optionee that is the buyer.

Here, an option to purchase for valuable consideration is only exchanged with the buyer. This option should be irrevocable, unrestricted, and exclusive. The buyer will not have any obligation to purchase the property or exercise the option once the purchase of the option is done. Nonetheless, if the buyer chooses to buy the property during the option time period, the seller is bound by the agreement to sell the property to the buyer at the agreed-upon price.

When it comes to this option agreement, there are certain elements that should be included in it. These elements include the consideration or the price that must be paid for such option. Second is the time, that is when the option must start and when it must expire. Third is the strike price that is the purchase price mutually agreed during the option period between the buyer and seller. Other elements include the other terms and conditions made by both parties during the option agreement.

2. Are real estate options the same as lease options?
The answer to this question is two-sided, that is, both a yes and a no. The option agreement that is being discussed in real estate options is more or less the sme as that of the lease real estate options. However, the lease option, as the name implies, comprises of a property lease. Even so, no matter what real estate agreement you will be getting yourself into, make sure to seek the advice from a real estate attorney before signing any contract.

3. What are the benefits of real estate options in purchasing property?

  • Saving the holding costs in purchasing a property
  • Saving the closing costs in selling and purchasing a property
  • Saving the holding costs of owning a property such as the maintenance costs
  • Saving time by not going through the typical loan process, going to, and setting up closings
  • Putting more good use to your time by finding better options.