OfflineWhat is the purpose of using an "Option to Purchase Agreement" instead of the regular Purchase Agreement? Is the Option to Purchase Agreement used for a short period of time to allow the wholesaler to bring in contractors for rehab valuations, have cash buyers look at the property, etc.? If that is the case couldn'that consideration be included in the regular Purchase Agreement?
Thanks
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Verna (newage8767)
As far as I know, the Option to Purchase and a standard Purchase Agreement is exactly the same thing. It is just two different names for the same product. It is just important to make sure that the terms of the purchase agreement (no matter what you call it) will allow you to proceed to closing and protect your rights.
The option to purchase gives you the right but not the obligation to purchase a property for a specified amount of time. If I give you $100 for the right to purchase your property for $50,000 within 3 months, I have the option of purchasing the property or letting the option expire in 3 months. If I want to purchase the property I have the right, if I choose not to purchase the property, I am not obligated to purchase it, but the $100 is gone.