I v othing happens in this business until an investor actually puts a piece of property under option. This is the first step that all would-be option investors must be willing to take if they are really serious about making money with real estate options! In this chapter, you will learn all of the do's and don'ts of how to close on the purchase of a real estate option. I also tell you how to avoid the common closing mistakes that most uninformed investors make, which can come back to haunt you later when you are trying to resell or exercise your option. The trick to having a smooth closing is to have all of the details of the transaction hammered out and finalized before you and the op-tionor ever sit down together at the closing table. This way, the optionor will not be able to try to renegotiate the terms of your option agreement at the closing. I once had an optionor who showed up at a closing and refused to sign our option agreement until I upped the option fee another $3,000. I quickly informed this guy that I was not in the business of negotiating with extortionists and that he could either honor our previously agreed-on option price or take a hike. Once he realized that I was not going to allow myself to be shaken down, he quickly backed off his demand and signed every single piece of paper that was put in front of him.
If you follow my advice in Chapter 16, you will have all of the title transfer documents prepared by your attorney prior to the closing date. This way, all the optionor has to do is to show up at closing and sign his or her name in the presence of a notary public. You can then have the documents held in escrow during the option period by your attorney or closing agent. Doing this will totally eliminate the possibility of the optionor reneging on the option agreement later on by failing to sell the property after the option has been exercised.
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