Backing Out of An Unconditional Contract...Can You or Can`t You?

[RedDeerWilliam]

Could you not do an AFS with the ability/provision to assign the contract to another Buyer (my Buyer)!? Then when the AFS comes close to the time action would need to be taken, I could assign the contract to my Buyer who`d take over and purchase the property from the Seller. Except of course the Buyer would have to cut me a separate cheque to come up to the price we agree he would buy it at from me!

With the Lease Option, I`d imagine that I`d have to have a Seller who was willing to go for that and somewhat understand what a Lease Option is and how it works. If they don`t understand it, it could create confusion and we all know what a confused mind often likes to do!? However, if the Seller is really motivated then that motivation could supersede the fear because the fear of NOT doing a deal could be bigger than the fear of confusion! So my point here may be moot!

QUOTE (MarkKruse @ Dec 13 2009, 08:38 PM) An Agreement For Sale or a Buy-Sell Agreement are methods for taking control or purchasing a property.

An Option serves a very different purpose. It is just an agreement for you to potentially "take control" at an agreed price for an agreed period of time in exchange for the option money. Under the option, you can specify the documents under which the sale will proceed (if option is exercised) or you can work it out later (I like to have it attached to the option).
So...if you find a buyer and exercise your option, you could then theoretically proceed via AFS or Buy-Sell Agreement.

It really depends on the deal, the people and the circumstances you are dealing with.
Mark

 

[GordonDaniel]

Option contract might be a good alternative for private sellers, but a lot of the junkers I`ve looked at from the MLS are bank owned. So I assume Options, AFS or any sort of owner financing is out of the question.

Cheers,
Gord

 

[RedDeerWilliam]

You are right about that! My realtor told me that bank & court-owned/controlled properties, like all-cash and no-condition deals with no weird terms or directions. The simpler and more straight-forward, the better your chances!

QUOTE (myfriendjose @ Dec 16 2009, 11:34 AM) Option contract might be a good alternative for private sellers, but a lot of the junkers I`ve looked at from the MLS are bank owned. So I assume Options, AFS or any sort of owner financing is out of the question.

Cheers,
Gord

 

[RedDeerWilliam]

I spoke with my lawyer today and I wanted to take the time to thank you again Mark for the `Lease Option to Purchase` suggestion. It appears that if one does not have the cash to close on a property within their own means that the Lease Option is by far the best, safest AND simplest way to go with the fewest repercussions should the deal not close!

Also FYI, my lawyer is not a big fan of Agreements For Sale. He says in his experience, very few AFS`s ever close, at least at his (Red Deer) office. He is a very ethical lawyer and maintains a fairly conservative approach. In a small town, he is also focused on keep a positive reputation for his practice and for his firm! So I guess I have to take that into account from where he`s coming from too!

I suppose though as a Seller with an AFS on a pretty house, it`s not such a bad thing if the deal never closes because then you get to keep the house longer which means more income!

I also learned today that I will NOT be putting in any offers on court or bank-owned/controlled properties unless I know I have the means to close or that could be a whole heap of bad news should I fail to close!

QUOTE (MarkKruse @ Dec 13 2009, 08:38 PM) An Option serves a very different purpose. It is just an agreement for you to potentially "take control" at an agreed price for an agreed period of time in exchange for the option money. Under the option, you can specify the documents under which the sale will proceed (if option is exercised) or you can work it out later (I like to have it attached to the option).
So...if you find a buyer and exercise your option, you could then theoretically proceed via AFS or Buy-Sell Agreement.

It really depends on the deal, the people and the circumstances you are dealing with.
Mark

 

[RedDeerWilliam]

I know the Option will vary from deal to deal Mark as you say, but is there a standard dollar-value you offer on the option when asking the Seller for the option?

QUOTE (MarkKruse @ Dec 13 2009, 08:38 PM) An Agreement For Sale or a Buy-Sell Agreement are methods for taking control or purchasing a property.

An Option serves a very different purpose. It is just an agreement for you to potentially "take control" at an agreed price for an agreed period of time in exchange for the option money. Under the option, you can specify the documents under which the sale will proceed (if option is exercised) or you can work it out later (I like to have it attached to the option).
So...if you find a buyer and exercise your option, you could then theoretically proceed via AFS or Buy-Sell Agreement.

It really depends on the deal, the people and the circumstances you are dealing with.
Mark