Option without a Deed of Trust

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  • I have a possible opportunity to get a long term (maybe 25 years) option on a house that will most certainly appreciate over that time. I’m just not sure I can get the seller to sign a Deed of Trust to secure it. I’m in NYS. Looking to pay 10k for the option. Would you do that without the Deed of Trust? Good deal or bad deal.

    Appreciate your opinions on this, planning on having this conversation with the Seller end of this week, Sunday the latest.


    Sholom, an option is only as valuable as what secures it to the property.

    No, I will not and would not do a long-term Option if the property owner isn’t willing to secure the Option to the Optioned property using a Mortgage or Deed of Trust.

    Look at it another way – and yes, we know an Option is NOT a loan – but what IF you were to be making a $10,000 loan to this homeowner, but the owner refused to secure the note to the property. Would you still make the loan…an Unsecured loan…to someone you don’t know?

    Bill Cook

    Ok, thanks. I’ll be sure to require one should the deal go through.

    Bill is correct,

    Your security interest is what you need to protect with this property. I don’t know your state laws, but if you’re acquiring you want to secure your option with a deed of trust or mortgage that is recorded in your state.

    My niche is I own some properties and I do option agreements with prospective purchasers who can’t afford and don’t want to own right now, but will be able to ,

    I personally spoke to, and went to Jack Miller for more than 20 years and the way things are turning now I am very glad that I did.

    I have owned rental properties for years and, with the landlord-tenant laws. The way they are. I will not be using them for rentals I will instead be offering them on an option,

    My options are a little unique there much like, commercial options where there is interest that cumulative during the time of the option.

    In essence, the longer they take to execute the option. The more money I make in interest. I look at the buyers were procuring the option and determine, by looking at who they are, where they been what they’ve done and what my risk factor is and I execute the agreement subject to the qualifications and with that and the qualifications. I also determine the amount of money that I will require, as their option consideration upfront.

    I also set the interest rate based on the risk represented.

    In my case. As a seller. It is much easier and simpler, to utilize the options and not record them. I will never and have never followed through and granted good clean clear title to a buyer who has performed.

    If in fact you’re taking money out of your pocket, just be smart enough to secure an attorney that will make sure your security interest in that property is properly documented!
    To your success.

    Dan B

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