Straight Options

A straight option allows the investor to get an option to purchase a property at a locked in price for a specific period of time. This allows the investor to receive any future profits if the property sells for more than the agreed upon price. With the option, the investor can market and sell the property, or he can sell the option to another investor, making a nice profit, and allowing the second investor to market and sell the property. The investor pays a specific amount to the seller when the option is signed to enforce the terms of the option. The general idea of an investor signing an option is that he has an agreement with the seller for a specific amount with hopes of finding a buyer for a higher price. The exclusive option agreement is binding for the seller, but it isn’t technically binding for the investor.

A seller may offer the investor an exclusive option or a non-exclusive option. An exclusive option means that only the investor has the right to sell the property. A non-exclusive option gives the seller the option of finding his own buyer or letting the investor market the property and sell it. If the seller can’t find a buyer, or the house has been on the market for months and months, he may be anxious to sell and will offer the investor an exclusive option.

What are the benefits to the seller of doing a straight option?

• There are no tenants to deal with.
• The house will be marketed quickly by a real estate professional.
• There will be no expense or risk to the seller.
• When the property is sold, the seller gets cash.

What are the benefits to the investor of doing a straight option?

• There is no risk or expense.
• There is no dealing with contractors or repairs.
• The higher the price of the home, the more profit the investor gets.
• There is no long-term commitment.
• There are no closing costs.