Purchasing an Option
EXAMPLE:
Home is listed with a realtor. Auction is 2 months away. Borrower owes 270K. Asking price is 290K. The homeowner basically knows he isn't going to make any money and all he wants is to avoid a foreclosure on his record.
The homeowner has agreed to sign a release form allowing me to negotiate with his lenders.
To protect my interest in the home while negotiating I know I can purchase an option from the homeowner, for say $10.00, to purchase the home at a price the lender and I agree on.
Since the listing won't expire before the auction date...does the option agreement which binds the homeowner to sell me the home conflict with the contract he has with the agent? In other words, the agent has an obligation to keep the home on the market as an active listing..if they receive an offer while I am negotiating that satisfies the full amount due on the loan...can they accept? Or would this be considered a backup offer if my negotiations fail?
Thanks in advance!
Mitch