The following describes how to secure a property and potentially purchase it using an option contract.

Reasons for using an option contract:

1. Renovate a property to sell at a higher price without having to buy it.

2. Secure a property to ascertain whether it is suitable for development without purchasing it.

3. Purchase a property off-the-plan and re-sell when it is completed.

4. Used a method to secure a property for a price in current market conditions and pay for it later when the price may have gone up.

5. Used as a method for rental/purchase. That is, rent the property for a period prior to purchasing it at some time in the future.

6. See the PIAA articles (or subscribe to Investment Strategies Articles) for more uses on Option Contracts.

Requirements:

* Option Contract ? see downloads section of PIAA.

* Deposit bond or cash for the deposit. A deposit bond is essentially an insurance contract for the cash deposit that can be obtained from a deposit bond company for a percentage of the deposit.

* A sales contract for the property.

The process:

1. The request is made to the vendor to purchase the property with an option contract. Note that some vendors may not understand that this type of purchase is the same as a sale.

2. The Option Contract is attached to the front page of the Contract of Sale.

3. A deposit is paid to the vendors? solicitor or deposit bond is provided.

4. When the contract has expired the vendor has the right to exercise a put option. That is, to request that sale of the property be executed either by the holder of the Option Contract or the purchasers permitted assignee.

5. The Call option may be exercised by the purchaser or by the nominee as set pout in the contract.

The period of time between the signing of the option contract and the execution of the Contract of sale is the time that;

* The property is built, as in the case of an off-the-plan purchase,

* The property is renovated,

* The property is marketed, or

* All of the above.