Real estate option contract: advantages for sellers
For sellers, real estate option contracts can secure a high-profit investment with relatively low risk.
Let’s say, for instance, an investor chooses a plot of land as a prime location for further development for a shopping center or a subdivision. Instead of buying the land and selling it to developers, the investor buys exclusive rights to the land through an option.
The investor then offers developers the land at a much higher price than the locked-in option purchase price. After the higher offer is accepted, the investor can sell the option itself for the purchase price. Otherwise, the investor can purchase the land and flip it to the developer, profiting from the difference.
As we have seen, a real estate option contract offers advantages for both buyers and sellers. For buyers, it is ideal if you want to purchase a lot for a certain price during a set time frame. For sellers, on the other hand, it is a great way to secure a high-profit investment with minimal risk.
Source: mpamag.com