Contracts
Which of the following describes an 'option contract' in North Dakota real estate?
AA contract requiring the buyer to purchase
BA contract where the buyer pays for the right, but not the obligation, to purchase at a set price within a set time✓ Correct
CA contract where the seller decides all terms
DA contract that automatically renews each year
Explanation
An option contract is a unilateral agreement where the buyer (optionee) pays consideration for the exclusive right—but not the obligation—to purchase the property at a specified price within a specified 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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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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