Contracts
What is an 'option contract' in real estate?
AA contract that allows either party to cancel at any time
BA unilateral contract giving the buyer the right, but not the obligation, to purchase property at a set price within a set time✓ Correct
CA contract requiring both parties to complete the transaction
DA contract between two brokers to cooperate on a listing
Explanation
An option contract is unilateral — the optionor (seller) is bound but the optionee (buyer) has the right, but not the obligation, to buy. The buyer pays option consideration for this right. If not exercised within the option period, the option expires.
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