We appreciate that this may be a new concept to you and can be tricky to get your head around, so we've tried to make our FAQ as comprehensive as possible.
If anything doesn't make sense, or you prefer to talk rather than read, please call 0493292309 and I'd be happy to take you through the process.
Sellers often use option contracts to sell their property if they need a specific length of time to vacate or to lock in a price thus providing a level of stability, certainty, and some direction for themselves. Once they have negotiated everything, then that's it.
The options process doesn't involve negotiation to lower a price for a quick sale, it's quite the opposite and is far more flexible, profitable, less stressful, and very negotiable for all parties but mostly you as the seller.
Builders and developers love options as there are also benefits for them. One is if they utilise our skills to find future projects they can tell us exactly where and what they are looking for knowing that we have the time and resources to find it for them.
They really just want to build projects which means, two having these jobs delivered directly to them with a contract timeframe attached allows them breathing space to easily program the next start date so they can move easily straight on to the next project reducing any downtime. They also don't have to compete in the open market at auctions for example on price which may not always go their way.
I as the advisor will keep the seller informed in any way you prefer and we agree on the best communication process when we meet. Once a buyer is found the communication transfers between you and them meaning that they become the new point of contact for you. This then becomes a standard private real estate sale between you the seller, and the new buyer.
I as the advisor will have now completed all contractual obligations to this point on your behalf. I am happy to continue to provide my time and support and be available until such time I am no longer needed. It is what I believe is good old-fashioned customer service.
It depends on what you and the advisor have negotiated. A deposit can either be paid once a buyer is found, this can happen anytime during the due diligence period, or possibly, anytime during the contract period. Whatever is negotiated to suit all parties.
Once the buyer has purchased the option agreement they then have the rest of the allocated time given in the contract to complete the sale with you the seller unless you have requested or negotiated otherwise.
This is no different now from a traditional real estate sale process. Once a buyer is found, the contract of sale is actioned between you both and you then negotiate a mutually agreeable departure date.
As you have allowed them time in the original option contract they would, I would assume, be more than flexible with you to come to an agreement of time that also complements their work schedule.
If I can't find you a buyer by the end of the due diligence period, or unless we can negotiate an extension, the agreement ceases to exist at the end of the due diligence period and we are both released from the contract as agreed.
Generally, the buyer will be a builder or developer. There are a few reasons why they like this process.
1. If profitable, they will be very happy that they have been approached directly with an opportunity
2. They have not wasted huge amounts of time researching to find this project themselves
3. They will also be happy they don't have to compete at auction or negotiate with others if the price is still realistic to the market
4. The extended negotiated timeframes you have allowed them provide breathing space and allow flexibility which can be seen by most as more important
5. The buyer can now move their resources seamlessly onto the next job with minimal disruption and or downtime
6. If they continue to utilise my services I will actively work for them researching properties specifically concurrent to their guidelines
As the advisor, I will sell the option contract directly to the buyer. Therefore my services to you the seller are completely free. The only costs incurred by you are the solicitor's fees for checking the option contracts.
You retain ownership of your property throughout the entire process. Nothing changes.
1. I nor anyone else can sell your property at any point in time without your consent
2. Only you the seller can activate the contract of sale for the property when selling privately
3. You the seller are only giving me the advisor control for the set period of time you both agreed
No, it is not. It is just an agreement of what you have discussed regarding the terms of the option agreement for the sale of your property. This document forms the framework of the intended option agreement. The advisor will then take and draw up the appropriate option contracts which you will then take to your solicitor and sign if you so choose.
Option contracts or agreements are governed by contract law. They are legally enforceable so long as they follow the requirements for a valid contract. Contract laws vary by State and by subject matter of the contract. They are widely used Australia-wide in the property market generally when extended timeframes are required.