Option to purchase
A contract giving a buyer the right, but not the obligation, to buy a property at a set price within a set window. The buyer pays an option fee for the privilege.
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Part 1 of 4
Why a seller cares
An option gives somebody the right to buy at a set price for a set time, usually for a fee. Sellers meet it in lease-option deals and in offers from investors who want time before committing.
Part 2 of 4
A simple example
A tenant pays $5,000 for a two-year option to buy at $250,000. For two years you cannot sell to anybody else at any price.
| What the holder does | What follows |
|---|---|
| Buys inside the window | The sale goes ahead at $250,000, whatever the market did |
| Lets the window pass | You keep the $5,000 and are free to sell to anyone |
| Tries to buy after the window | No right remains; it is a fresh negotiation |
An option is time bought with money. The price is fixed, the decision is theirs.
Part 3 of 4
What people get wrong
That an option obliges the buyer. It is a right, not a promise; only the seller is bound during the window.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines option to purchase in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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