Put and Call Options

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From: Michael McDonald


I am wanting to use a Put and Call Option on a multi-unit development that I wish to purchase.

My solicitor wants to charge me $2000.00 to prepare the agreements, which I think is horrific, given that they probably already have a pro-forma agreement on file.

I don't really want to spend this money if I don't have to, and was wondering if anyone has a Put and Call Option Agreement that they could provide me a copy of.

If anyone can help, I would be eternally grateful. Please email me at PrinceCharming@today.com.au if you can assist.

Thanks in advance for assistance.

Michael

 

[michaelg]

Reply: 1
From: Michael G


Michael,

Take a step back for a moment...

Is this a common transaction in regards to the public?, my personal view, I don't think so.

What is the intention of a put call strategy?, to control then flip several properties with little money down. Would such an instrument save you money?, more than likely.

What would happen if the contract was not written properly?, would you be liable for a lot of holding costs if you were forced to buy all the properties?, possibly, maybe a nice little clause that extends your option contract due to some event was missing.

Would "templates" exist for such things? more than likely.

Would the Solicitor be liable for penalties if the contract failed to do what you instructed it to do?, maybe?, do they need to pay for liability insurance to cover such possibilities?, more than likely.

Hmmm, $2000 to save potentially $10,000s. $2000 to cover near unlimited liability on the Solicitor?.

Personally I think its a small cost for a big return on your part and a small reward for a big risk on the Solicitor's part.

Just one thought to put things into perspective, have a think about how much you might of spent on your last holiday.

If $2000 is a lot of money, then negotiate a further $2k off the asking price or something.

Just some thoughts...

Michael

 

[WebBoard]

Reply: 1.1
From: Terry Avery


It would seem to me that if you are going to build a "team" that will help
you build your wealth then you need someone who is working for you (and is
being paid by you). By all means find a template but if it all turns to poo
you may find the costs of getting sorted out are very high. Maybe $2,000 is
high but if there are problems then it is in your solicitor's interest so
work with you to sort them out. I assume you plan on doing more than one,
have you discussed with your solicitor their charges for subsequent deals?
Maybe the fee will be less on the next one as they will already have
educated you on the finer points which is what eats into their time.

Cheers

 

[WebBoard]

Reply: 2
From: Sam Coster


Hi Michael
Welcome to the club, I have been on this
search for the last 2 months without success.
From what I have learnt, PaCO contracts are
very specialised and tailored to suit the
individual investor.

I heared of one guy who shared his documents
with another Investor, who thought he knew
better and changed the odd word. The contract
fell over, now the owner of the documents is
being sued for alot of money.

I am in the process of paying big money to
get my Solicitor and Accountant to draw
documents for me.

It seems that those that have documents
already have had to do the same thing and
they are not prepared to share them.

Samc
Enjoy the journey, its half the fun.