Real Estate Option - (Use When Buying) REAL ESTATE OPTION
The OPTIONOR hereby grants the OPTIONEE an exclusive right to purchase under the following terms:
Commencing on _________________________, 20_______, the OPTIONEE shall have an OPTION to purchase the real property owned by OPTIONOR located at:
______________________________________________________________________________ and described as
(legal description)
This OPTION to purchase shall expire on ________________________, 20____________
OPTIONOR acknowledges receipt of $________________ as OPTION consideration from OPTIONEE.
The OPTIONEE may exercise this OPTION by notice to the owner.
The TOTAL PURCHASE PRICE shall be $_______________________ and the balance necessary to payoff the mortgage loan held at: (Name of mortgage company)_______________________________
Loan #_______________________________, created in the name of (Sellers)___________________ ___________________________, at the time Loan Number ________________________is paid in full.
1. The Option period may be extended by _____________ under the same terms and conditions upon payment by the OPTIONEE of $_______________.
2. All documents necessary for title transfer, including , but not limited to a Warranty Deed and Bill of Sale, shall be executed and held in escrow with a person, agent or entity of OPTIONEE’S CHOOSING. OPTIONOR shall execute a deed of trust or mortgage in favor of OPTIONEE to secure performance of this agreement.
3. In the event that OPTIONEE is in possession of the property described above under a valid lease agreement at the time of exercise of this OPTION, $_______________ of each monthly rent payment under said lease will be credited towards the purchase price of the afore mentioned property.
4. If the mortgage payments, property taxes, association fees, insurance premiums, or other property payments on __________________________ ever go into arrears, then ________________________________ (Optionor) hereby gives_______________________________ (Optionee) or his/her/its assigns or heirs the right to make payments directly to the lender or other party who is owed payment on Optionor's behalf.
These payments sent directly to the lender or these other parties by the Optionee shall be considered as rent (or other money due) received by Optionor from Optionee for compliance of Residential Lease Agreement between these parties dated _________________.
To adequately compensate the Optionee for the additional risk incurred by making such payments of additional rents and costs, for every one dollar ($1) paid to lender or other parties to make up late payment(s) and/or fee, premiums, etc., three dollars ($3) shall be credited off the option price stated in this Option Agreement.
1 or 2
Once these payments/fees are made current, Optionee may make his or her payments directly to the Lender and other parties for the remainder of the lease period state in the Residential Lease Agreement dated on ______________ between _____________________________ (Optionee/Tenant) and ____________________________ (Optionor/Landlord).
These continuing payments sent directly to the lender or these other parties shall be considered as rent (or other money due) received by Optionor/Landlord for compliance of Residential Lease Agreement between these parties dated on ___________________, but shall not be credited with the three for one credit detailed above."
5. During the period between exercise of the OPTION by the OPTIONEE and the closing the premises shall be adequately insured for fire and other perils by the owner.
6. OPTIONEE shall be permitted the right of assignment of this option.
7. The OPTIONOR agrees to refrain from encumbering title to the property in anyway from the date of this agreement without the specific written agreement of the OPTIONEE.
8. This agreement shall be binding upon the parties hereto and their respective heirs, administrators, successors, and assigns.
9. When OPTIONEE exercises OPTION OPTIONOR agrees to provide insured title to the OPTIONEE by means of a Warranty Deed.
10. This agreement shall be governed by, construed and enforced in accordance with the laws of the State of ____________________________
11. The following closing costs shall be borne by the OPTIONOR:
_________________________
The following closing costs shall be borne by the OPTIONEE:
__________________________
______________________________________ ____________________________________
OPTIONOR OPTIONOR
_______________________________ _______________________________
OPTIONEE DATE This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
