Call option costs?

[Chippo]

G'Day All

Just wondering in anyone knows what the cost is to set up a call option contract through a solicitor before you submit it to the vendor?

Cheers

Chippo

 

[Propertunity]

A call option contract is a fairly standard form. Unless you are having your solicitor re-invent an already created wheel, it should just be a matter of your solicitor's time to explain how it all works to you.

The call option premium can be any figure from $1 (or 10c really) up to whatever you and the vendor can agree on, that you will forfeit to the vendor if you do not proceed to purchase at or before the agreed date & time.

 

[Chippo]

G'Day Propertunity,

The reason I ask is I was told that for just the contract so before I even approach a vendor it could cost $6000 + which didnt sound right to me. So you only pay for the solicitors time to prepare and explain the contact?

Cheers

Chippo

 

[boods99]

Hi Chippo,
I notice that you (may) be in WA.
REIWA have a standard Option to Purchase Land contract that you can get from an agent if you ask nicely. Obviously, you may need to customise it to suit your needs, however it makes a good base.
I had one lying around somewhere but can't seem to find it
Boods

 

[Propertunity]

As boods99 says, it is a standard REI form. The $6K sounds like it could be the option premium to me - not the cost of a form.

 

[Marty McDonald]

1% of strike price / agreed future price seems to be about the standard for development sites.