Contracts
An option contract in real estate gives the optionee the:
AObligation to purchase the property within the option period
BRight to purchase the property at a set price within a specified period✓ Correct
CRight of first refusal if the owner decides to sell
DRight to lease the property with no option to purchase
Explanation
An option contract gives the optionee (buyer) the right, but not the obligation, to purchase the property at an agreed price within a specified time period. The optionor (seller) is bound by the option and cannot sell to another party during the option period.
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Key Terms to Know
Option Contract
A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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