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If you exercise the option, the seller is required under the contract to sell you the property listed in the option for the price listed in the option. Upon exercising the option, it becomes a bilateral contract since the buyer is then obligated to perform as well.
Once a buyer has an option to buy a property, the seller cannot sell the property to anyone else. The buyer pays for the option to make this real estate purchase. The option usually includes a predetermined purchase price and is valid for a specified term such as six months to a year.
If you buy an options contract, it grants you the right but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. A call option gives the holder the right to buy a stock and a put option gives the holder the right to sell a stock.
An option fee is a small percentage of the total cost of a home, rarely exceeding $500. In fact, some modestly priced homes only include option fees of $100. The purpose of an option fee is to give a prospective buyer the time to arrange safety and code inspections of the property he or she intends to buy.
An option to purchase agreement gives a home buyer the exclusive right to purchase a property within a specified time period and for a fixed or sometimes variable price. This, in turn, prevents sellers from providing other parties with offers or selling to them within this time period.
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When a contract is made, it becomes binding the seller must sell and the buyer must buy according to the agreed-upon terms and price. One a contract for an option to buy has been created, the property cannot be sold to anyone else. When creating a contract, the buyer will often pay a fee to have this option.
Yes, you can cancel the purchase agreement by paying an option fee. This will end the purchase contract between the seller and buyer, and put the real property back on the market for other home buyers. Both parties have a specific time frame to cancel a real estate option contract.
There are two alternatives to exercising the option: the buyer can choose to either sell the contract before expiration, which is more popular than exercising, or let it expire worthless and forego only the premium paid up front to buy the call contract if the stock price remains below the call strike price.
A real estate purchase option is a contract on a specific piece of real estate that allows the buyer the exclusive right to purchase the property. Once a buyer has an option to buy a property, the seller cannot sell the property to anyone else.
In the case of options contracts, you are not bound to fulfil the contract. As such, if the contract is not acted upon within the expiry date, it simply expires. The premium that you paid to buy the option is forfeited by the seller. You dont have to pay anything else.

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