Final answer:
The interest in the property during the option period is retained by the optionee. An option gives the optionee the right to buy or sell the property but does not transfer ownership unless the option is exercised.
Step-by-step explanation:
An option contract in real estate is a form of agreement between the buyer and the seller — outlining the price of the property that the seller actively agrees to, so long as the buyer purchases the property in the set timeframe. During the option period, the interest in the property held by the optionee is retained by the optionee. An option is a contractual agreement which gives the optionee the right, but not the obligation, to buy or sell the underlying property at a set price within a specific time period.
The optionor grants this right, often in exchange for a fee known as an option premium. During the option period, the optionee can decide whether or not to exercise the option. However, the option does not constitute a transfer of ownership or any interest in the property until the option is actually exercised. If the optionee chooses not to exercise the option, the interest in the property remains unchanged, and thus the correct answer is c. Retained by the optionee.