Saturday, May 27th, 2017

RSS Feed for This PostCurrent Article

The Real Estate Option Contract…Undressed (Plus Free Download)

Ok, so if you heard my recent interview with Andy Proper about his Virtual Bird Dog Blueprint, then you may recall I promised I’d share my personal real estate option agreement with anyone who’d like to see and use it.

Then I decided to do one better and make a video about it, kind of running through the form itself, what different parts mean and how to fill it out.

Then it turned into two videos.  A combined factor of me being a bit too wordy and YouTube only allowing videos of up to 10 minutes.

I remember how intimidating real estate forms can be, especially early in your REI career.  There’s nothing all that hard about the option agreement, but I know a tutorial like this would have been a tremendous help to me earlier on.

So here’s the deal…

If you want to download and use two of my personal Real Estate Option Contracts I use in my own real estate investing business, please feel free.  Just right-click on the links below and choose “Save Targe As…” or “Save Link As…” (depending on whether you use FF or IE as your browser…and I don’t know what the heck it is for Mac users…sorry.)

Download 2 Free Real Estate Option Contracts…

Disclaimer: I’m not an attorney and am not attempting to give legal advice in any way.  Please use this form at your own risk.  By downloading it you agree to hold this site and it’s owners strictly harmless from liability due to your use of these documents.  Also you should consult your own legal counsel and real estate professional(s) before taking any action or inaction based on these documents or the videos below.  By downloading these forms and/or watching these videos you agree 100% with these terms.

  1. Real Estate Option Contract #1 – “The Simple 1-Pager”
  2. Real Estate Option Contract #2 – “The Still-Pretty-Simple-But-Slightly-Fluffier One”

Watch the Real Estate Option Contract Tutorial…

And here’s part 1 and part 2 of me sharing a few tips and pointers about using Real Estate Options in your real estate investing endeavors, as well as a walk-through of the first (1-pager) contract.

Hope you enjoy — and hey, I’m considering doing more like this and giving more forms away.  But I don’t want to do it if nobody really cares.  It does take some time, after all.

So please chime in with a comment about whether or not you found this useful and how much or little you’d be interested in more of the same in the future.


Real Estate Option Contract Undressed – PART 1

Real Estate Option Contract Undressed – Part 2

Please comment below!

Technorati Tags: real estate option contract, real estate investing, free real estate forms, real estate option agreement

GD Star Rating
The Real Estate Option Contract…Undressed (Plus Free Download), 4.9 out of 5 based on 10 ratings


JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • Peekay

    Nice presentation. Will get in touch soon,
    Peekay Kumar

  • Ryan

    Hey JP, I was wondering is it possible to put an option on a house between a buyer and a seller if the house is currently listed with a realtor? 

  • Hi, Ryan. Yes, but it’s likely the seller will still owe a commission to the agent. Unless they have some special arrangement that buyers who don’t come directly through the agent don’t generate a commission – which would be very unusual.

    Typically listing agreements state that during the listing period, the agent’s entitled to a commission regardless of where the buyer comes from, so long as the relationship is initiated during the listing period, even if the actual sale is after the listing period.

    It’s just a way of protecting the agent’s interests in keeping the owner from skirting around them. And I think it’s reasonable too. I used to be an agent…they do a lot of work without any pay when listing a house, plus often come out of pocket for marketing expenses…all in the hopes of getting a commission.

    So bottom line: Yes, if you put your option on the property during the listing period, chances are the owner will owe the agent a commission.


    { }

    { }

  • Ryan

    Thanks JP! Awesome answer, awesome video and awesome site!! Thanks again for all the free forms. 

  • Pingback: Real Estate Options: Resource Guide()

  • mike

    is there a standard window of time that you go with for the beginning and expiration date of the option? Do you just try to project a rough time frame based on how long you think it will take to market the peoperty?

  • Kalen


    I came across this post from the “legally paying bird dogs” post you did years ago. I have a question about how the option contract works with a bird dog (I’m a wholesaler). Do I have to have them come with me to the seller’s house to get put on the option contract as principle?

    Thanks for all your great info!


  • Hi, Kalen. I don’t see any real reason to have the bird dog come with you. I wouldn’t worry about it personally.

  • Kalen

    Thanks for the reply! I have really enjoyed getting to read your posts and see your perspective on REI. It’s great to see a fellow Christ follower doing the REI the right way!

    So how would they assign me the contract if they are not principle?

    Where in the process would I have them fill out the option contract? (would I do everything normal as a wholesaler; meet with seller, get contract, open escrow, etc?)

    As you can see I’m a little confused. I’m trying to get some bird dogs (the legal way) and I understand how to fill out the contract (thanks to your fantastic posts!), but I’m just confused on the practical steps of when/how to fit in the option to my process…

    Thanks again!

  • Hi, Kalen. Sorry for the confusion.

    Well if the bird dog just brings you nothing more than a name and address, then I’d say pay them a flat fee as a “consulting fee” on the HUD. Then they won’t need to be a principal in the transaction…and treating it as a flat fee rather than a percent of the deal helps keep you out of the “practicing real estate without a license” realm, in my opinion.

    If the bird dog brings you a deal in which they’ve already done some negotiating and have rapport with the seller in place…then yes, it could be helpful to have them along with you, to introduce you to the seller as his “partner” perhaps…then to keep things legit, you could both be on the option/purchase agreement, and he then he could quit claim his piece to you at closing, in return for a fee.

    Another option would be to put have him secure the option, then have him assign the option over to you in return for his fee (at closing, as always).

    Lots of investors don’t go through all the steps to do it legit like this…they just fly under the radar and no one notices. But if you want to keep things as straight as you can, these would be the ways I’d do it.

    Disclaimer: I’m not an attorney, please consult yours first before taking any action or inaction based on my input here (butt covered, hopefully)

  • Kolef88

    I would offer two more differences between an option and a contract:
    First, the option buyer ordinarily has to pay some substantial consideration for the option, that will be nonrefundable if the option is not exercised (but will be credited if the option is exercised), whereas a contract buyer will ordinarily have a due diligence period during which he gets a free look at the property and can cancel the contract during due diligence and receive a full refund of any deposit monies.
    Second, the contract buyer is ordinarily held to an implied standard of good faith and fair dealing, which means that if he cancels the contract in bad faith, then the seller may have legal remedies, whereas the option buyer can decide not to exercise for any reason or no reason, without fear of legal repercussions.

  • SusanM.

    Great article. I just completed a three day course where I spent two thousand dollars and and twenty four hours and didn’t get as much out of it as I did here. Please keep it up.

  • Wesley Hall

    Thank You for this great wealth of priceless information.

  • You’re welcome, Wesley – thanks for stopping by and for commenting!

  • mike

    My attorney told me option contracts are illegal unless you are licensed with a real estate license or securities license so how are by passing these requirements?

  • Hi, Mike. With all due respect, whatever attorney told you that option contracts are illegal w/out a license either didn’t understand what you meant or is just flat out wrong. Attorney’s aren’t infallible and will at times offer you squishy answers confidently b/c you’re paying them to be the expert… but really don’t understand b/c it’s not their area of expertise. Ask a REAL ESTATE attorney and you’ll get the right answer. The fact is, using an option contract has been a longstanding, tried and true, time-tested, proven tool for people to secure a legal, equitable interest in a piece of real estate… and it does not require any kind of license, any more than it takes a license to enter into a purchase contract… as an individual representing yourself, you can enter into this agreement at any time. Again, no disrespect intended to you or your attorney… just shooting straight here. Thanks for commenting!

  • Maja

    Hi Thank you very much for your help! I was wondering if you could please explain me how do you assign the option to the end buyer? What contract do you use? I do not understand the process, I am doing wholesaling Thank you

  • Maja

    Hi Thank you very much for your help! I was wondering if you could please explain me how do you assign the option to the end buyer? What contract do you use? I do not understand the process, I am doing wholesaling Thank you!