Did you know that by using real estate options you can legally take control of valuable properties to generate quick income with only a small amount of money. Learning to understand and use this valuable technique can be extremely valuable to the success of a new or seasoned real estate investor.

In order to take full advantage of this great technique, you only need to understand how the technique works and become familiar with, and follow, your local state laws. Having learned how to use this technique and the law, you will soon be on your way to a great return on your investing efforts.

Here are some very important questions concerning real estate options…

What is a real estate option? Is that the same as a Lease Option? I thought real estate options were illegal! What are the steps in a real estate option transaction? And--How are options used to purchase real estate at discounted prices?

What is a real estate option?

A real estate option is a unilateral agreement:

Between an optionor (The Seller) and an optionee (The Buyer, for the rest of this article I will refer to them only as the Buyer and Seller)

Binding only on the Seller

Where the exclusive, unrestricted, and irrevocable option to purchase is exchanged with the Buyer for valuable consideration

The purchase of the option does not impose any obligation upon the Buyer to exercise the option and or purchase the property

However, the Seller is bound by the agreement to sell the property at the agreed price to the Buyer should the Buyer choose to purchase the property within the option time period

The elements that must be spelled out in an option agreement are:

" Price (consideration) to be paid for the option " Time-when will the option start and when will it expire " Strike Price-the mutually agreed purchase price or property during the option period " Other terms and conditions of the option agreement

Is a real estate option the same as a Lease Option?

Yes and No! The option part of a lease option agreement could be exactly the same as the option agreement we are discussing but the lease option includes a lease for the property.

I thought real estate options were illegal!

Real Estate Options of some kind are legal in most free countries in the world. It is the lease part that may cause some legal problems in certain American States. In order to avoid any problems, be sure to consult with a real estate attorney before entering into any real estate agreement.

What are the steps in a real estate option transaction?

Here is a step by step overview of an option transaction:

1. The Buyer and the Seller enter into an agreement

And the Buyer pays an option consideration to the Seller

The Seller grants the Buyer

The exclusive, unrestricted, and irrevocable option to purchase property

at a fixed purchase price

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