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I once heard Jack Miller mention optioning properties that are already listed. “Optioning under listings” I think he called it. Can Jackie, or someone, tell me the wording to put into your option agreement that, in effect, says you are getting the option “subject to” the listing?
Are there any articles that deal specifically with optioning under listings? Is anyone doing this now? How is it working?
Thanks for any help.
Hi – Can someone chime in on this topic, please? It was on part 2 of the Mini Options Seminar where Jack mentions optioning underneath a listing & insisting on paying the agent’s commission.
I am planning on doing this in NJ for a residential multi-family (owner occupies 1 out of the 3 units).
The seller: Melissa’s listing contract expires May 2017. As of right now, the property is not on the MLS, but the agent has it as a pocket listing.Can I lock up property with an option for below listing price, with a clause stating ‘I will not exercise until after the listing contract expires’?
Can Melissa and I record the option and record a mortgage on the property without knowledge of listing agent? Since I am exercising after expiration of listing, does the agent still need to be paid a commission?
Melissa wants to use proceeds from sale to downgrade to a smaller residence. Is there a way I can parlay this into a deal where I benefit on the sale of Melissa’s current and future residence? Can I 1031 exchange her current residence into her new residence, and carryback the financing having Melissa pay me directly for her new residence? What happens to the difference in money?
List:$500k (Seller has received verbal offers in the 400 – 420 range)
Debt: $60K HELOC/HE Loan.
Repairs: I have not walked the property yet, but she mentioned Electric and Plumbing needs attention.
Tenants: Buyer to inherit 1 tenant paying way below market value
Distress: Seller received notice that her department will be downsized this year. Seller also is tired of paying property tax. Seller is emotionally detached since she’s been living there for 40 years and 2 of her immediate family members passed away in the property and wants to move on and get rid of it.
Terms: Seller wants at least 3-6 mos to vacate and I told her I can accommodate that. Seller is very receptive to this as their agent couldn’t come up with such a deal.
How can I structure an option to fit these terms? Exercise option after listing with a window of 3-6 months to close? Giving the property time to appreciate and giving me time to find a buyer.
I am open to suggestions! I have zero deals under my belt.
Thank you,
AllenThis can certainly be done… but You need to make sure you record a lien against the property to protect your option. A memorandum of option is not good enough – attorney’s and title companies overlook them all the time.
1. realize that if the listing agent finds a buyer, you will need to be paid a release fee for your option to go away. This could be negotiated with the seller.
2. You could assist the listing again in finding a buyer so you get to the “profit” but the listing agent still gets paid.
In most states, a licensed agent must put the property on MLS in a certain time frame – they cannot hold as a pocket listing.
Is there any lien against the property besides the $60K?
What will your option strike price be?
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