Option to Buy?

[Senechal]

Will someone please explain "Option to buy" listings?

Is there any way to determine the purchase price from the option price? Is it a standard percentage?

[beachproperty]

Since you didn't give too much information I will try to explain based on my own assumptions ...ie with regard to Real Estate.

.

An "option to buy"...Is generally a contract (an agreement between two parties) wherein you usually pay a premium up front to purchase the real estate for a fixed price sometime in the future. The "premium" paid up front is something that is negotiated (can be 5%, 10% or more of the agreed future price)

"Time frame"....Again this is an agreed on fixed time period upon which the contract to buy must be executed before said time period is up. Such time period can 1 year, 2 years etc in the future (generally the longer the time period in the future to buy the more expensive the "option premium"

"Price"...the option is an agreement to buy in the future at some agreed fixed price. Again ....such price is negotiable.

it should be noted that in an "option to buy" if you do not execute said option before it expires you lose your option money paid.

The above is my attempt to explain a straight forward "option to buy"

BUT ....I think you may be thinking about something wherein you "Rent to buy" which is a hybrid of an "option to buy"

"Rent to buy" agreements allow you to live on the property during the option period. Again ....everything is negotiable....ie...sometimes the "rent" paid (or sometimes some portion of it) is applicable towards the future fixed price for the property .....ie if you pay 30,000 baht a month rent 360,000 baht a year may be applied toward the purchase price.Again this is something that should be agreed to in writing.

CAUTION....This is not something you should do by yourself. An iron clad contract (presumably prepared by a good lawyer) spelling out ALL conditions is necessary. ALSO ...."Rent to buy" are an easy way to rip people off...

Hope the above is not too complicated and is of help to you.

Edited April 13, 2014 by beachproperty

[Senechal]

Thanks for the response --

I'm not talking about rent-to-buy. I'm seeing an increasing number of listings on various real-estate sites that are listed in the "for sale" sections, but they're actually "option to buy". As you said, this is likely a standard option payment that confers the 'right to buy' at a later date, minus the option. And yes, if the option expires the deal is lost.

But that's not what I'm trying to figure out. It's a tad annoying that none of these listings includes the actual purchase price -- without which it's pretty hard to gauge interest. Just knowing how much the 'option' costs, without actually knowing the purchase price is rather useless... No one's going to be interested in the 'option to buy' without knowing the cost ... unless of course you can infer the purchase price from the price of the option.

So what I'm asking is: Are options typically some fixed percentage of purchase price that would allow one to guess the purchase price? Or are these listings really as annoyingly lacking in information as they seem? (ie: You would need to call the broker to find out what the cost is...)

[beachproperty]

So what I'm asking is: Are options typically some fixed percentage of purchase price that would allow one to guess the purchase price? Or are these listings really as annoyingly lacking in information as they seem? (ie: You would need to call the broker to find out what the cost is...)

As indicated before ....nothing is typical in a real estate transaction.

So the sellers indicating a "option" price w/o indicating a sales price....Well their just fishing...wanting you to call ...and YES I agree they really are as annoyingly lacking in information as they seem!

Good luck in your search for property ...have you tried DDproperty.com they seem

to be good and have listings all over Thailand.

[KittenKong]

'm seeing an increasing number of listings on various real-estate sites that are listed in the "for sale" sections, but they're actually "option to buy".

I have never seen anything even remotely like this, unless perhaps you mean buying a contract on off-plan units. Can you post a link?

[falang07]

I have see many on DDproperty.com

[KittenKong]

I have see many on DDproperty.com

I had a quick look and indeed they do. They appear to be contracts for off-plan units, as I mentioned. So just a fancy name for flippers.