Contracts
An option contract in Michigan gives the optionee the:
AObligation to purchase the property
BRight but not the obligation to purchase at a set price within a set time✓ Correct
CRight to list the property for sale
DObligation to pay rent during the option period
Explanation
An option contract gives the optionee the right — but not the obligation — to purchase the property at a specified price within a specified period. The optionor is bound but the optionee has flexibility.
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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.
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.
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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