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Option Agreement

An Option Agreement is a type of real estate contract that gives you certain rights for a certain amount of time in exchange for something of value.

An Option Agreement will usually let you buy a certain house for a certain price by a certain date. The downside is you have to pay for  these rights. If you decide to purchase the house great! But if you don’t then after the Option Expiration Date you have no right. And you don’t get any money back.

What Does A Title Company Do In Real Estate?

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Title Company

This post was last updated on July 12th, 2021 at 08:23 pm

Selling your house fast is easier with a good Title Company. But what exactly do they do? What do they contribute to the overall process? And why do you need one?

Let’s take a look at all the things a Title Company can do for you. You may be surprised at just how much they do to be sure your transaction goes smooth!

What Is A Title Company?

A Title Company is a company that handles real estate transactions. They are the professional team that takes a Purchase Agreement and turns it into a transaction!

It’s usually a small businesses which is privately owned. You will find some have several branches. Others may have a single office.  More importantly it would be impossible to sell a house without them.

What Is The Title Company’s Job?

The first step in selling your house is making a deal. But what happens after that? This is where the Title Company takes over.

Once the Purchase Agreement has been signed the Title Company gets to work. They start by creating a file containing the information of the buyer, seller and lender. They will put a copy of the Purchase Agreement into the file to be used later.

Abstracting

The first thing will be to order the Abstract of Title. Once it has been ordered it will be updated and certified. After this a Title Examiner will go through the Abstract. They review the documents and conduct a Title Search to be sure the seller has marketable title.

They will also be looking to see what may need to be taken care of at Closing. Things like mortgages, liens and back taxes will need to be paid at Closing. A list of things needed to complete a Closing is created. After all of these things are reviewed the Title Examiner will issue a Title Commitment.

Coordination

Title Companies have a large staff. Different people do different jobs. One of the main jobs is coordinating. The Title Company needs to be sure everything comes together nicely. That means making sure liens are paid off. Getting paperwork to banks and lenders on time.

There are also documents that need to be made prior to closing. Deeds and Closing Statements need to be created. Numbers need to be double checked. All of this takes a lot of time and effort. Title Company employees work hard to coordinate Closings.

Escrow Services

Title Company’s also provide escrow services. They hold all of the funds.

After Closing they send the funds were they need to go. They will send money to pay off existing mortgages and liens. This is done to be sure that everything that needs to be paid gets paid.

The buyers and sellers don’t actually touch the money. Everything else gets paid first. After those payments are made the sellers are sent any money that they are due. Usually this is done with either a check or a wire transfer.

Closing Services

When everything is properly prepared a Closing will be arranged. At Closing the buyers and sellers meet with a Settlement Agent. The Settlement Agent will explain the paperwork and gather the required signatures.

They will show you exactly what money is going where. They will also answer any last minute questions you may have. Once the Closing is complete the Title Company will make sure that all of the documents get properly filed.

How Do You Pick A Good Title Company?

You want to be sure the Title Company you work with will help you. First look at online reviews. Then referrals from friends and family.

Not all Title Company’s are equal. Be sure you work with one that will meet your needs. Don’t be afraid to ask questions and get to know the staff! If they have a great reputation and great customer service you’re on the right track.

181-Close-Now buys a lot of houses! We have worked with many different Title Companies. Here are just a few that we can highly recommend!

Trustmark Title

Lincoln Title

Photo courtesy of Old Republic Title Company

Does 181-Close-Now Work With Title Company’s?

Selling your house fast is easy with 181-Close-Now. We work closely with the Title Company to make sure things get done FAST! Our Closing Options Analysts go above and beyond to get your file to the front of the line. This means we are able to close faster than other homebuyers!

Be careful! A reputable homebuyer will ALWAYS have a proper Closing. If someone tries to buy your house without doing title work or having a Closing something is wrong. Title work protects the sellers as well as the buyers. 181-Close-Now will NEVER ask you to sell a house without a formal Closing and proper title work.

Sell Your House Fast With 181-Close-Now

See just how fast and easy selling your house can be. Just give us a call at 181-Close-Now or fill out our Sell My House Fast Contact Form. One of our Closing Options Analysts will help you every step of the way. You can also fill out the form below. Your privacy is always protected and there is no obligation.


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    Even if you aren’t ready to sell your house you can still get in touch. Questions or concerns? Our team is here to help! You can use our Contact Us page, call us at 1(812)567-3669 or email Support@181closenow.com Or just send us a quick message:


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      What Is An Option Agreement In Real Estate?

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      Option Agreement

      This post was last updated on July 12th, 2021 at 08:23 pm

      In real estate an Option Agreement is a type of Purchase Agreement. An Option Agreement gives a potential buyer the right, but not the obligation, to purchase a house.

      The Option Agreement says the buyer can buy a house for a certain amount of time, at a certain price and on certain terms. This is very similar to other Options Agreements such as Stock Options. A key feature of an Option Agreement is that a buyer CAN buy a house. But they don’t HAVE to buy the house.

      What Does An Option Agreement Contain?

      A well written option agreement will contain at the minimum:

      • An expiration date
      • A Purchase Price
      • The Premium paid for the Option
      • Description of the Asset or Property

      Expiration Date Of An Option

      A good Option Agreement should clearly state the date the Option expires. The expiration date of the Option is the date by which the buyer has to notify the seller whether or not they plan to execute, or use, the Option.

      The transaction does not have to be completed by the expiration date. The expiration date is simply the date by which the buyer must notify the seller of their intent to move forward. If the expiration date passes without Execution the option is no good. This is called Option Expiration.

      Using Option Agreements Can Be Dangerous

      I recently saw an Option Agreement that had no expiration date! A friend of mine purchased it. He now has the right to buy a certain house at a certain price anytime he chooses!

      The option has no expiration date. By failing to put an expiration date the seller gave him an option that may never end. This is one very important reason to be sure that an Option Agreement has a clear expiration date!

      Purchase Or Strike Price Of An Option

      When we talk about Options Agreements the proper term for purchase price is the Strike Price. The price which the house can be purchased. It’s the same thing.

      The purchase price, like other aspects of an Option Agreement, are negotiated between the buyer and seller. This is the price that the buyer must pay to be able to buy the house.

      If the buyer is not willing to pay the purchase price then the Option Agreement is not likely to get executed. Setting a Strike Price too high can make it very hard to sell an Option Agreement. Few buyers are willing to buy an Option they know they can’t execute.

      What Is An Option Premium

      When using Options a Premium is the amount that the buyer pays the seller for the rights they are receiving. The seller gets to keep this Premium even if the Option doesn’t get exercised or expires.

      The seller is giving the buyer rights to buy the property at a certain price for a certain amount of time. The Premium is what the seller receives for doing this. There is no set Premium that an Option Agreement must have.

      It can be as little as a few dollars or as much as several million! The Premium, like most aspects of an Option, is negotiated between the buyer and seller.

      What Type Of Property Description Does An Option Contain

      An Option Agreement can contain any type of property description that the buyer and seller are comfortable with. It can be something as simple as the address to a house. Sometimes it can be a complicated legal description for a property. It depends on the type, size and value of the property.

      As long as the description can accurately describe the property (and makes both the buyer and seller feel comfortable) the property description can be written any way you like.

      What Are Option Agreements Used For

      Now we know a little about what a basic Option Agreement contains. Next lets look at what they can be used for.

      Basic Option Agreement Example

      Let’s say Sam has 20 acres of undeveloped land by the highway. Tom thinks that the area by the highway will soon be used for commercial development. Sam will sell the property for $500,000. Tom thinks the property is worth about $200,000.

      Tom and Sam agree to use an Option Agreement. Sam is willing to sell the property to Tom for $500,000 any time in the next 2 years. They agree that Tom will pay Sam a $5,000 premium for the Option. Sam gets to keep the $5,000 premium even if Tom doesn’t end up executing the option.

      About 6 months later the area by the highway starts being developed for commercial use and starts selling for over $100,000 per acre. Tom tells Sam he would like to execute the Option and they move forward with the transaction. Tom would then pay Sam $500,000 for the 20 acres.

      This is a bit of an extreme example but it shows why an Option Agreement can be a good idea in certain situations. If Tom had been wrong and the land had not suddenly gone up in value he could have just let the Option expire in which case he would have only been out the premium he paid.

      What Is The Most Common Real Estate Option

      Options are not uncommon in real estate. We see them most when we look at Lease Options. Lease Options combined a residential lease with a purchase Option Agreement.

      It’s often said that 99% of Options expire and become worthless. While some sources say that the number is much lower they usually only look at Stock Options. Most Options, especially those that are part of a Lease Option, do indeed expire and become worthless.

      Should I Use An Option Agreement To Buy Or Sell A House?

      Option Agreements can be very powerful. They can also be very dangerous. Most people simply don’t understand Option Agreements. You should never use a tool you don’t know how to use.

      I’ve seen a lot of landlords and tenants both have issues with Option Agreements. Landlords want to make more money but end up with legal issues. This is normally because they don’t understand what they are offering their tenants.

      Sometimes it’s the tenant that loses out. I’ve met many tenants who thought they were getting more than they understood. They spend a lot of money for an Option Agreement that was never going to be executable.

      Does 181-Close-Now Use Option Agreements?

      The job of a Closing Options Analyst for 181-Close-Now is to find a closing solution that fits your need. 181-Close-Now prefers to use a Purchase Agreement. But if it helps a client we will consider using an Option Agreement in certain circumstances.

      We have a rule when using an Option Agreement. Our Closing Options Analyst will go over the agreement with you in detail. We make absolutely sure that out clients understand what an Option Agreement is. You’ll know what it is and why it best fits your situation!

      Unlike other companies that buy houses in Oklahoma 181-Close-Now always keeps you informed! See the 181-Close-Now difference for yourself.

      Ready To Sell Your House Fast?

      If you’re ready to sell your house fast we’re here to help. Just fill out our Sell My House Fast Contact Form to or give us a call at 181-Close-Now and we will make you a cash offer.

      We buy houses as-is so you never have to make repairs. Just fill out the form below and one of our Closing Options Analysts will call you to speak about your unique situation. Your privacy is always protected and there is no obligation.


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        What Our Clients Have To Say

        181-Close-Now makes selling your house fast and easy. Don’ t take our word for it. Check out our Client Testimonials. Here’s what one of our past clients had to say about their experience selling a house to 181-Close-Now:

        Sell My House Fast Oklahoma City Client Review

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        181CloseNow We Buy Houses For Cash As-Is Fast
        181CloseNow As Featured On NBC Fox CW ABC News We Buy Houses For Cash As-Is Fast

        When you sell your house to 181-Close-Now you are working with the most experienced home buying team in Oklahoma. We’ve been featured on NBC News, Fox, The CW, ABC News and many more! Our team has the experience to make selling your house fast for cash as-is easy and stress free!

        Get In Touch

        Even if you aren’t ready to sell your house you can still get in touch. Questions or concerns? Our team is here to help! You can use our Contact Us page, call us at 1(812)567-3669 or email Support@181closenow.com Or just send us a quick message:


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