Question

A prospective buyer wants to have the right but not the obligation to purchase a property within 90 days for $100,000. Which alternative should the buyer pursue? Select one:

a. A contract for deed (land contract)
b. A standard purchase contract
c. An option agreement
d. A right of first refusal

Answer 1

An option agreement grants the buyer the right to purchase a property within a given timeframe without the obligation to do so, making it the correct choice for the buyer who wants the flexibility to decide later.

Step-by-step explanation:

The buyer in this scenario wants the right, but not the obligation, to purchase a property within 90 days for $100,000. The best alternative for this buyer is:

c. An option agreement

An option agreement provides the buyer the exclusive right to purchase the property within a specified period, at a predetermined price, but does not require them to follow through with the purchase. This contrasts with:

• A contract for deed (land contract), which is a seller financing agreement where the buyer makes payments over time, gaining equity but not full ownership until fully paid.
• A standard purchase contract, which obligates the buyer to purchase the property.
• A right of first refusal, which only gives the holder the opportunity to match any offer the seller receives from another party.