Final answer:
When Broker Able exercises the option, he is buying the property from seller Baker at a predetermined price and terms, becoming the new owner. This allows him to enter into contracts with other parties to sell or lease the property.
Step-by-step explanation:
When Broker Able exercises the option to purchase the property himself, he is essentially buying the property from seller Baker. Exercising the option means that Broker Able is choosing to exercise his right to buy the property at a predetermined price and terms.
This option is often included in listing agreements to give brokers the opportunity to secure the property for themselves if they find a buyer. It allows brokers to take advantage of potential profits by buying the property at a discounted price and then reselling it to a buyer at a higher price.
Once the option is exercised, Broker Able becomes the new owner of the property and can enter into contracts with other parties to sell or lease the property as he sees fit.