I hardly ever use generic documents as an investor and real estate agent I want to be protected from lawsuits and lack of disclosure. It is expensive having lawyers drawing up every document, however it's critical to have documents to protect you. It's not only critical you have documents to protect you, it's all critical you as an agent is aware and informed on what documents and contracts are being utilized by most investors. Here are two pages of an Option Purchase Contract being used by Investors to secure control over short sale properties.
Option Contract for Sale and Purchase
The SELLER and the BUYER (named below) hereby enter into this Option Contract for Sale and Purchase of real estate.
The SELLER, in consideration of the BUYER paying $10.00 or other good and valuable consideration (the “Option Deposit”), gives to the BUYER the exclusive option (the “Option”) to purchase the property described below (the “Property”). In the event that the BUYER exercises this Option, the Option Deposit shall be applied towards the purchase price of the Property. The Option Deposit is non-refundable and will be forfeited in the event that BUYER fails to exercise the Option unless otherwise so stated. The BUYER shall have the right to exercise this Option during a period of time beginning at 9:00 am. on _____________ 200__, and lasting until 5:30 p.m. on ______,200__, (Option Period”).
Subject to the BUYER exercising this Option, the SELLER and the BUYER hereby agree that the SELLER shall sell and the BUYER shall buy the Property described below upon the following terms and conditions. SELLER fully agrees and acknowledges that the above described consideration given by the BUYER constitutes legal, adequate, and valuable consideration for the purposes of this Contract.
1. NOTICE, COMMENCEMENT DATE AND EFFECTIVE DATE: The “Commencement Date” shall be the date that the last of the parties to this Contract signs and executes below, The obligations of the Parties under this Option Contract begin on the Commencement Date. The “Effective Date” is the date that the SELLER receives a Notice of Purchase from the BUYER that the BUYER is exercising its Option under this Contract. The BUYER shall exercise this Option by giving written notice by certified or registered mail to the SELLER at the address indicated above (the letter must be delivered to SELLER by the time and date indicated above) or by hand delivering written notice to the SELLER.
The date that the SELLER receives this notice shall be known as the “Effective Date.” It is understood and agreed that time is of essence as to the payment of the purchase price under this provision.
2. DESCRIPTION OF PARTIES
SELLER: ___________________________ BUYER:____________________________
___________________________________ ___________________________________
ADDRESS: _________________________ ADDRESS: ______________ ___________
___________________________________ ___________________________________
PHONE: ___________________________ PHONE: ____________________________
3. DESCRIPTION OF PROPERTY BEING SOLD:
STREET ADDRESS) CITY/STATE/ZIP: __________________________________________
Parcel#: ______________________________________________________________________
4. PURCHASE PRICE
The Purchase Price is $ _______________ or the total purchase price will be the negotiated balances of all liens, mortgages and closing costs.
SELLER understands that this transaction is a short sale and is contingent upon acceptance of short pay offers that are satisfactory to the buyer as payment in full by all current lienholders and that the SELLER will receive NO funds at closing. The Option period shall be reasonably extended for the purpose of obtaining said satisfactory approval(s).
The parties acknowledge that the purchase price has been initially based on an estimated negotiated debt at closing. During negotiations, there may be several different preliminary contracts with different estimated purchase prices submitted by Buyer to the lender(s) until a final discounted figure is accepted.
Accordingly, Seller agrees to authorize Buyer to prepare various negotiating offers with various prices without obtaining Seller’s signature or approval of each and every negotiating offer.
5. FINANCING AND INSPECTION PERIOD: The Property is being sold “As Is” with regard to the physical condition of the Property and any improvements. Seller is giving no warranties to the BUYER as to the physical condition of the real property or any improvements. BUYER shall have ____ days (the “Financing and Inspection Period”) following the Effective Date to inspect and evaluate the Property. SELLER shall grant to the BUYER reasonable access to the Property for purposes of inspection and evaluation (such as environmental testing, home inspection, and BPO or appraisals, etc.). If prior to the end of the Financing and Inspection Period, BUYER gives notice to SELLER that BUYER elects to cancel this Contract (the “Cancellation Notice”), this Contract shall terminate. If BUYER does not deliver the Cancellation Notice the Contract shall continue.
______ This transaction is contingent upon buyer obtaining acceptable financing;
OR
______ This is a cash transaction.
6. REPRESENTATIONS AND WARRANTIES: To induce the BUYER to enter into this Agreement, the SELLER makes the following representations, warranties, and covenants.
A. The property is being sold “As Is” with regard to the physical condition of any
improvements. Seller is giving no warranties to the BUYER.
I reference about 400 documents, I guess I am a document collector!
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