Contracts
An option contract in real estate gives the optionee the:
AObligation to purchase the property by a certain date
BRight, but not the obligation, to purchase the property within a specified time at a set price✓ Correct
CRight to list the property for sale
DRight to receive rental income during the option period
Explanation
An option contract grants the optionee (potential buyer) the exclusive right, but not the obligation, to purchase the property at an agreed price within a specified period. The optionor (seller) is bound to sell if the option is exercised.
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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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