Raise cash for your requirements

How do you raise cash quickly and save a few rand of commission at the same time?

You may be in a tight cash flow situation at the moment. You have a property that is worth say R1 000 000 (this may be any amount for that matter). If you sell this property to get finance it will take some time to realise the cash. You may also pay an estate agent say five to seven percent as commission. So this could be between R50 000 and R70 000.

If you were to sell an option on your property you could immediately raise cash. Let us say that you want to sell the property for the price above. You are now willing to sell an option to an investor for R40 000 that he could buy your property from you at R950 000 in the next six months provided that the transfer is completed within nine months after signature of the option. You do not need to make use of an estate agent paying them the full commission. A small commission of say one or two percent will be fair - you have buyer and seller together!

The holder of the option will be allowed to trade in the option which means he may sell that to another person. If he does not exercise the option within the period, he will lose the money that he paid for the option. He may, however, sell the option for say R70 000 and make a profit of R30 000 on the option. A very good return for the risk then.

You may want to buy the option back from the option holder in the future to retain your house. This may be written into the option agreement.

If you are interested to consider this possibility, e-mail hansie@anamcara.co.za