An option contract in real estate gives the optionee:
Correct Answer
B) The right, but not the obligation, to purchase the property within a set time period.
An option contract gives the optionee (the potential buyer) the right, but not the obligation, to purchase a property at a specified price within a set time period. The optionor (seller) is bound to keep the offer open during that period. If the optionee does not exercise the option, the consideration paid is typically forfeited to the optionor.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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