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LSDefine
Simple English definitions for legal terms
option to purchase real property
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A quick definition of option to purchase real property:
An option to purchase real property is a contract between the owner of a piece of land or property and another person, allowing the latter to buy the property at a specified price within a certain time frame, without being obligated to do so. It gives the person the right to choose whether or not to buy the property, but does not require them to do so. This type of contract is commonly used in real estate transactions.
A more thorough explanation:
An option to purchase real property is a contract between the owner of a property and another party that allows the latter to buy the property at a specified price within a specified time, or within a reasonable time in the future, without imposing an obligation to purchase upon the person to whom it is given.
For example, John owns a house and enters into an option contract with Jane, allowing her to buy the house for $200,000 within the next six months. Jane has the right to buy the house, but she is not obligated to do so.
This type of option is commonly used in real estate transactions, allowing potential buyers to secure the right to purchase a property while they obtain financing or complete due diligence.