Whatever you do when negotiating a real estate option, always insist that your real estate option agreement include a fixed purchase price for the property being put under option. And never agree to pay a purchase price based on the property's appraised value at the time the option is exercised. Doing so would defeat the whole purpose for using real estate options. After all, it would not make any sense financially to buy a real estate option without first locking in the purchase price of the property under option. As far as I am concerned, anyone who is foolish enough to buy a real estate option without knowing the actual purchase price of the property deserves to lose money! I once had a property owner, who I later found out was also a Florida licensed real estate broker, try to talk me into signing a one-year option agreement that included a clause stipulating that the purchase price of the property would be based on the property's tax-assessed value at the time the option was exercised, plus an additional $40,000. Needless to say, I told this guy what he could do with his cocka-mamie property valuation formula.
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The dynamics of investing can be very emotional and stressful if not properly managed. When you are aware of what is all involved you give yourself the power to avoid those situations or at least manage them effectively. That will make your investments more exciting, rewarding, and enjoyable. Those positive factors will only lead to greater success in all that achieve with investments and life.