If you pay $1000 for a 90-day option on property offered to you at $200,000, which of the following is true?
A) You have bought a 90-day period of time within which you may or may not accept the offer of the land.
B) With the signing of the option agreement, you have entered into two contracts-a contract for time and another for land.
C) You have agreed that you will accept the offer of land within the 90-day period.
D) If you do not exercise the option, you can get your $1000 back.
E) The seller of the land can revoke the offer of the land any time before acceptance.

Question

Quizplus · Accepted Answer

An option contract in real estate gives the buyer the exclusive right, but not the obligation, to purchase the property within a specified period. The $1000 paid is for the privilege of having the option to buy the land at the agreed price within 90 days, not a commitment to purchase.

If You Pay $1000 for a 90-Day Option on Property