Real Estate Investor · Boise, ID · Member since 2009 · 62 posts · 27 votes
I have a option contract that I have been using for my offers on SS and I have been reading that some people are recording a Notice of option to help them get by the seasoning issues from lenders and FHA. My question is this legit and does anyone have or know where I can get a form?
You can find notice of options forms at oldschooltitle.com or http://www.coastal-funding.com/downloads.html
I doubt notice of options qualify for seasoning the deed. Stick with cash buyers and convential lenders with no seasoning. Its easier to find them, then trying to circumvent seasoning issues.
I wasn't aware an 'Option' contract initiates seasoning.
Who told you that? My understanding has always been the DEED needs to be transferred and recorded to start seasoning but then again, I've completely walked away from doing shorts myself and outsource all of it now.
You can find notice of options forms at oldschooltitle.com or http://www.coastal-funding.com/downloads.html
I doubt notice of options qualify for seasoning the deed. Stick with cash buyers and convential lenders with no seasoning. Its easier to find them, then trying to circumvent seasoning issues.
I ahve worked for a major lender owned a Loss Mitigation company and still some of my best friends are Managers or Higher at some major lenders and I don't know of one that would allow you to avoid seasoning issues. Personally I have never used a option contract and never will there are ways to avoid the seasoning issues without hoop jumping.
Personally, I have used many different contracts and I prefer to use option contracts. I find they have virtually the same acceptance as compared to a PSA and are very good when using the MLS.
Each contract has its limitations, so you need to pick the one that best serves your needs. I prefer to use contracts which help me to close deals and the option contract is the best so far.
Options contract may not work in your state or in your local MLS, so do your homework.
I'm out of the loop on forms for the most part, but for non-licensees,
first tuesday has a lot of RE forms, not sure if they have the one you are looking for or not. Best of Luck!
-- Dawn
I have a option contract that I have been using for my offers on SS and I have been reading that some people are recording a Notice of option to help them get by the seasoning issues from lenders and FHA. My question is this legit and does anyone have or know where I can get a form?
Thanks in advance!
Dan Walters
Dan,
The Notice of Option definitely doesn't have anything to do with seasoning. Most Investors use it to cloud title so the homeowner can't go behind their back and work with another Investor. But if you have already built rapport with the homeowner this won't be an issue. It's also used for when the end buyer lender pulls title, they see what your intentions are for the property, which provides additional disclosure.
The Notice of Option definitely doesn't have anything to do with seasoning. Most Investors use it to cloud title so the homeowner can't go behind their back and work with another Investor. But if you have already built rapport with the homeowner this won't be an issue. It's also used for when the end buyer lender pulls title, they see what your intentions are for the property, which provides additional disclosure.
Thanks. I figured as much, but I've been reading some information on a few different sites that were suggesting that it would help get around the seasoning issue. I've followed up with some local title companies since my post and have had this cleared up.
I have found that for my companies use, a standard purchase and sales agreement meets our needs. But I do have several clients that use the option contract.
It all really breaks down to your state laws, MLS regulations, and your companies goals.
Just to the original post: You might be surprised at how easy it is to increase your forms library by spending a couple hours at the court hose searching real estate filings. You'll find security agreements, notices, les pindis filings, assignments, etc. One nice thing about that is that those public files contain documents which are used in your area. Using those as your "go by" form, you have something to start with to modify for your needs. Bill
So what is the consensus of filing a "Notice of Option Contract"?
My results after further research when posing the question is this:
Recording the Notice of Option contract ensures you a clouded title if the seller tries to go behind your back (as stated by Audley in an earlier response on the thread).
My initial intent for posing the question was to inquire about getting around seasoning issues for FHA and lender's SS written approval requirements. It was in response to an earlier forum thread that this was stated it was possible. After further investigation, it is a technique that a certain "guru" uses and works that into SS negotiations. They never state that it is a way around seasoning, but it is a technique worth trying to see if the lender will accept.