Sell Option Contract Real Estate

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What type of contract is a real estate option contract?

In an option contract, the seller is the optionor and the buyer is the optionee. It is a unilateral contract in that the seller is obligated to sell, but the buyer has the option to buy. When created, an option contract is a unilateral contract. But when the buyer exercises the option, it becomes a bilateral contract.

What does an option mean in real estate?

Broadly, a real estate option is a specially designed contract provision between a buyer and a seller. The seller offers the buyer the option to buy a property by a specified period of time at a fixed price. The buyer purchases the option to buy or not buy the property by the end of the holding period.

What is an option in a contract?

An options contract is an agreement between two parties to facilitate a potential transaction on the underlying security at a preset price, referred to as the strike price, prior to the expiration date. ... For stock options, a single contract covers 100 shares of the underlying stock.

How long can an option contract stay open?

If the option is for a fixed period, like six months, the exercise of the option must take place within that time. If a time is not specified in the option contract, a court will require the seller to hold the offer open for a \u201creasonable time.\u201d An option can't be extended for an indefinite time or \u201cforever.\u201d

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