Contracts
What is an 'option contract' in real estate?
AA contract giving a buyer the right, but not the obligation, to purchase property at a set price within a specified time period✓ Correct
BA lease agreement that includes an automatic purchase clause
CA contract allowing the seller to choose between multiple buyers
DA contingency that gives the buyer the option to extend escrow
Explanation
An option contract grants the optionee (typically the buyer) the right — but not the obligation — to purchase property at a predetermined price within a set period. The optionor (seller) is bound if the optionee exercises the option; the optionee has no obligation to purchase.
Related California Contracts Questions
- What is the legal effect of a 'time is of the essence' clause in a California real estate contract?
- In California, a counteroffer by the seller has what legal effect on the buyer's original offer?
- What is a 'land contract' (contract of sale or installment sale contract)?
- What is an 'option contract' in real estate?
- A real estate purchase contract is fully executed when:
- A buyer submits an offer on a home. Before the seller accepts, the buyer withdraws the offer. What is the result?
- A listing agreement is a contract between:
- The legal remedy of 'specific performance' in a real estate contract means:
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