What is the Put Option Contract?
With the Guaranteed Backup Contract, Home Sale Assured provides a homeowner with a contractual commitment to purchase their home up to 90 days after the homeowner buys their next home. However, the homeowner is not obligated to sell to Home Sale Assured if the homeowner receives a better offer during the contract period. Therefore, a homeowner and their agent are free to market and list the property for sale knowing the backup contract is in place as a safety net. Home Sale Assured stands ready to make an all cash purchase at the already agreed upon sales price if and when the homeowner calls upon Home Sale Assured to do so. The homeowner is required to sell the home within that 90 day period, either to Home Sale Assured or the better offer. This is known as the “put option” in finance terms.
Why is the Put Option Contract so powerful?
Most homeowners would prefer to buy their next home before they sell their current home since this allows homeowners to take better control of the timing and ensures the homeowner will find their next dream house before they are forced out of their current home. Families can now make less hasty decisions, get settled into schools on their timeframe, and ensure their current home is ready for sale after they move out-rather than having to deal with showings while they are still living there.
However, most people will not qualify for two home loans at the same time. Thus, lenders will typically make selling the current home a condition of providing the new financing- which is what causes a home sale contingency to be part of the offer on the new house. Sellers do not like home sale contingencies because it creates uncertainty in the transaction. Thus, sellers may often select the all cash offer to remove the uncertainty, even at a lower offer price- since of course they need to sell before buying their new home. And the vicious cycle continues……..
The Guaranteed Backup Contract is incredibly powerful in that it breaks the vicious cycle. When a homeowner has a Guaranteed Backup Contract on their existing home, a lender will treat that property as sold and thus will go ahead and finance the new purchase provided everything else is in order—even if that sale has not yet closed!! Now, a homeowner can buy their new home, move in, and then close of the sale of their current home, either with Home Sale Assured, or the highest offer their agent is able to obtain for them within the 90 day option period.
What the Put Option Contract means to stakeholders
The best part of the Guaranteed Sales Contract is that everyone wins!!!
- Lenders can finance more people at the right time- without the usual and customary hoops and hurdles surrounding debt calculations.
- Agents can best leverage their marketing to ensure obtaining the highest valuations since they are no longer under the duress of having to sell the home before their client can buy their next one
- Families can now make the right choices for their specific needs- while retaining all of the freedom and flexibility to ensure they maximize their greatest asset
What the Put Option Contract costs
Home Sale Assured offers its Guaranteed Backup Contract with a 90 day option premium of $2500.00. That’s a flat fee, there are no other charges, regardless of the home’s value. Once the option premium is paid, the homeowner can either “put” the house to Home Sale Assured (in other words, sell the house at the agreed upon price) or can cancel the contract if they receive a better offer. For $2500, the homeowner receives the peace of mind necessary to make the right decisions and remove the angst associated with transitioning from one home to another. Its really that simple.
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