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Think of an option like a listing agreement– but more. An option is actually a contract to purchase a property with a specific amount and specific time frame. There is a special provision or contingency clause that says something else has to happen before you will exercise your option. That something else could be:
approval for financing
approval of partner
inspection – satisfactory
resell during a highest bidder sale
other…An Option gives you control of the property, much like a listing agreement, until that something else happens.
An Option can be short term, like 2-4 weeks. Or it can be long term like 6 months or 6 years or more. .
Learn more about Options in Module 8.
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(Disclaimer: I am not a lawyer, and have no ambitions to ever play one on TV.)To give you a new set of eyes to view options, think of them as a unique asset class.
Options are potentially a fascinating store of value, and even more so if they are structured to be renewable, the longer the better.
They are relatively anonymous, compared with a property title.
They are highly portable, even globally, for any of you expat wannabees.
They are not, to the best of my knowledge, an item of seizure interest by TSA, unlike precious metals. You don?t have to go through the drill that a successful Ukrainian escapee accomplished when he crossed the border out of the old Soviet Union. He had his platinum stash drawn into wire, of the same diameter as wire clothing hangers. He then bent that wire into clothes hangers, onto which he loaded all the clothes he could to cross into the free world. The border guards never had a clue. No need to be that crafty with options.
They are highly saleable.
They incur no reporting requirement from the IRS or FATCA (although anything can change).
They do have some burdens. They require more energy, initiative and knowledge to create, maybe some renewal funding, and potentially have some hurdles to enforce, depending on the legal atmosphere in the applicable country.
–Dee
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