POPs (C) 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
 
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?
 
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
 
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