POPs (C) Lotana

[Lotana]

I just had a thought that when everybody expects residential property market to crash there is a market for a new product - Put Options on Property (POP). That's how it should work:

You own a house worth say $300,000. You and I sign a contract. According to the contract, I grant you a POP, or the right to sell your property for a specified price (say $270,000) within a specified period (say 12 months). Exercising a POP means: you let me market and sell your propery. If it sells for less than $270,000 - I will pay you the difference, if it sells higher, I will pocket the difference (or we'll share it). I will charge you a fee to issue the POP.

It looks that products like this may become popular if offered by a respectable organisation, such as an insurance company, a large RE franchise, a large mortgage broker etc.

What do people think?

Say cheese :p ,

Lotana

[paulzag]

I think a thread about this came up in the old forum. From memory there was a company that offered a Put. Butthe weren't a long established reputable firm.

Can't remember the details. Anybody else remember?

[Lotana]

Hi PaulZag,

Timing is the difference. When every man and his dog is crying about the property bubble, which is about to burst - is the best time to sell POPs.

I set up a poll in the main forum to see how investors feel about the future.

Say cheese :p ,

Lotana