An option agreement is
A) a contract transferring the fee simple to a new owner.
B) a contract by which the offeror of property promises to hold his offer open for a period of time during which the offeree can accept the offer and the property can't be sold to another.
C) a contract by which an offeree promises to buy the property offered at a later date set in the contract.
D) a contract that provides that a seller will retain the title in the property until the buyer has made all of the required payments.
E) a contract that provides that a debtor will transfer title in property to a creditor as security for repayment of the debt.

Question

Quizplus · Accepted Answer

An option agreement is a contract by which the offeror of property promises to hold his offer open for a period of time during which the offeree can accept the offer and the property can't be sold to another. This agreement gives the offeree the right but not the obligation to purchase the property at a later date for a specified price. The offeror receives a fee for this option contract which is typically non-refundable. The option agreement is useful for parties who are interested in purchasing/selling real estate but need more time to make a decision or are waiting for certain conditions (such as financing) to be met.

An Option Agreement Is