The Real Estate Option Contract…Undressed (Plus Free Download)
By JP Moses on Oct 11, 2008 in Featured, Free REI Resources, Free Real Estate Investing Forms
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.
- Real Estate Option Contract #1 - “The Simple 1-Pager”
- 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.
Thanks,
FREE Real Estate Option Contract Pt 1 (Step-by-Step)
from REI Tips on Vimeo.
FREE Real Estate Option Contract Pt 2 (Step-by-Step)
from REI Tips on Vimeo.
What did you think? Was it helpful? Not to much? Want more like this? Please leave a comment below…
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24 Comment(s)
By Peggy (3 comments) on Oct 13, 2008 | Reply
Love this idea. A gal can’t have too many forms! Keep ‘em coming…
By Mark (3 comments) on Oct 13, 2008 | Reply
This is great JP! Please do more of these videos/forms. I’m a newbie and this information is very helpful. Thank you!
By Daniel (1 comments) on Oct 16, 2008 | Reply
That’s great thanks for doing that in more would be good as well. Not sure why but my doc scrambles with letters and dots and things all over the place. If you have a gmail account you can go to free google docs and export it as a PDF and it will be more universal and also professional and printable etc. It’s really easy at google documents. By Thanks for the option contract explaination. I need some learning for Australia but i guess it’s a similar concept America!
By Scott Taylor (4 comments) on Oct 17, 2008 | Reply
Nice one JP. I’ve been using 30 and 45 day options to flip properties for the last 6 months. It works like a charm and is much easier than doing a double close. In fact, we’ll have to go over it sometime. It’s a great ‘low risk’ strategy…
Cheers,
taylor
By Ryan (1 comments) on Oct 19, 2008 | Reply
I loved this Idea JP! you Rock! the Tutorial is awesome!
By Amaru (1 comments) on Oct 19, 2008 | Reply
What do you know about FLex Options?
By Terry (1 comments) on Oct 20, 2008 | Reply
Thanks JP! Would you be willing to roleplay and show us how you speak to sellers and answer their objections?
By jim (3 comments) on Oct 26, 2008 | Reply
Just what I was looking for. Google is your friend JP, I may just stick around this site for a while.
By JP Moses (53 comments) on Oct 27, 2008 | Reply
@jim - Wonderful, Jim! Glad you stumbled upon me! And even more glad I could hook you up with an option agreement!
…jp
By gary (1 comments) on Nov 2, 2008 | Reply
Very Good , this IS the basics of wholesaling a house and as a beginner ( about to close my 1st deal ! yippie ) this is exactly how i did it and , i really hope you all out there use this info to get into or grow your business . and I can tell you this type of info isn’t out there for free like this is everywhere you go , my hat is off to the folks at REI tips for being straight up and letting you peek into what they do .,,, good job guys.
By Curtis (1 comments) on Nov 14, 2008 | Reply
I appreciate you sharing this valuable information with all of us. Especially the newer investors. I found the contract easy to understand, but the video made it even easier. Please keep up the good work and thank you .
By Tim Cronin (2 comments) on Nov 14, 2008 | Reply
Just wanted to know how to get option consideration to optioner if doing these deals cross country I.E. virtually. How do I get it back if deal doesn’t go thru? Will the money be applied as earnest money when switching from option to purch n sales agreement, or do I assign the option itself?Please let me know. Thanx.
By JP Moses (53 comments) on Nov 14, 2008 | Reply
@Tim Cronin -
“Just wanted to know how to get option consideration to optioner if doing these deals cross country I.E. virtually…”
You could always wire it or FedEx it. Heck you could even Paypal it!
“…How do I get it back if deal doesn’t go thru?”
When you put down option consideration, you’re typically not planning on getting it back. It’s a FEE you’re paying in return for being granted your exclusive option on the property for a designated time frame. But if you have some short term stipulations (like contractor inspection, etc.) I suppose you could make your option consideration refundable if those contingencies aren’t met. You’d either have to trust the seller to return it, or have your consideration held in escrow by a closing attorney and only released upon terms of the agreement.
“Will the money be applied as earnest money when switching from option to purch n sales agreement, or do I assign the option itself? Please let me know. Thanx.”
Option consideration is separate from ernest money in every case I’ve seen. I can’t speak to all situations, but I would say it’s normal for them to be separate and distinct from each other. And yes, you can assign the option itself.
Great questions!
By Dean (1 comments) on Nov 16, 2008 | Reply
J P,
I’v just down loaded the forms and its always good to have different ones to use.The videos are a great help,really great,its like looking over you shoulder or being right there with ya.How can I save them to my hard drive and attach them to the forms?
Thanks Again,
Dean
By JP Moses (53 comments) on Nov 17, 2008 | Reply
@Dean - Dean, I’m so glad you like them. Thanks for the feedback.
You can download and save YouTube videos using a service at http://www.keepvid.com. You’ll also need to download a free .FLV viewer to be able to watch them. And don’t forget to add “.flv” to the end of the file extension after you download it.
Technically you’re not supposed to be able to download YouTube videos. I just shared one of my little secrets with you.
…jp
By Swarup (1 comments) on Nov 19, 2008 | Reply
Wow. Thanks very much jp. It’s awesome to see someone explain this stuff. I needed this! …and more of this kind of information.
By Dub (2 comments) on Nov 28, 2008 | Reply
Great Video Tutorial JP! Very Informative and Easy To Grasp. This is the Tpye of Information I Love. Please Continue Making These Type Of Video Tutorials… With Relevant and Useful Information. Outstanding Job!
By Rachel (2 comments) on Dec 2, 2008 | Reply
I was listening to your first video on viddler. By the way,
> it was great so is your entire website.
>
> My question about the option contract since you mentioned about
> assigning. Wouldn’t I need another contract to assign? I live in the
> state of Virginia. Would this work in VA?
By JP Moses (53 comments) on Dec 2, 2008 | Reply
@Rachel - A keen observation, Rachel.
Yes, you’d need an assignment agreement in order to assign your option contract.
And you can get one free right here: http://reitips.com/real-estate-assignment-contract
…jp
By Paul (1 comments) on Dec 9, 2008 | Reply
Hi thanks for the tutorials it is like having the ob1 of contracts in your ear
By Karl (3 comments) on Dec 10, 2008 | Reply
JP, dissecting the purchase and sales agreement, the option contract, and the assignment contract were excellent. You are an excellent teacher, very clear and concise. Thank you.
Question: could the option agreement be revised slightly to tie down a contract on other personal properties such as boats, planes, or jewelry?
From JP: Great question. The answer is…I have no earthly idea.
Sorry, but I’m blank on that one.
Thanks for commenting though!
…jp
By Karl (3 comments) on Dec 11, 2008 | Reply
So, JP, if you were beginning to learn wholesaling, would the combination of the option contract and the assignment contract be all needed to wholesale a property? Thanks.
You could definitely do it that way, Karl!
…jp
By Karl (3 comments) on Dec 24, 2008 | Reply
Hey JP, one more related question. This is a tax related question: Could you deduct $100 from a self directed Roth IRA to put an option on a home and then assign the property and take the profits and keep it in your ROTH IRA? (turn $100 into $10,000 in a Roth and the $10,000 is now tax free upon withdrawal at 59 1/2 yrs of age?)
From JP: Karl, that’s a great question. And I have absolutely no idea.
I’ve never dealt with the investing from your Roth IRA stuff. Anyone else out there that has wanna chime in?
By Gionki (1 comments) on Dec 29, 2008 | Reply
Jp- As a Wholesaler,
1. How where are your top 3 ways you are marketing to investors your wholesaling service?
2. How are you keep your investor list clean?
3. Ever wholesaled a house from the MLS?