Contracts
What is an 'option contract' in Delaware real estate?
AA contract giving the buyer the right to choose among several properties
BA contract in which the seller gives the buyer the exclusive right to purchase a specific property at a fixed price within a set time period — the buyer pays consideration for this right but is not obligated to purchase✓ Correct
CA contract allowing either party to terminate with 30 days' notice
DA contingency clause allowing the buyer to opt out if prices rise
Explanation
An option contract gives the optionee (buyer) the exclusive right (but not obligation) to purchase a specific property at a predetermined price within a specified period. The optionee pays consideration for this right (option fee).
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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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