What Recourse Does the Optionee Have If the Seller Does

Real Estate - Option Contracts Flashcards required elements-CONSIDERATION - something of value in exchage for promises. amount must be stated in contract-OPTION PERIOD - if not, "reasonable time"-PRICE of property-COMPLY WITH STATUTE OF FRAUDS aka - WRITTEN AND SIGNED by THE OPTIONORmust also include any terms/condtiions Who can enforce an option contract-the optionee or the optionor?optioneeBC its a unilateral contract What Recourse Does the Optionee Have If the Seller Does Breach the Contract?-court order for performance (court forces seller to sell to buyer-monetary damages (reimbursement, different between prices) option contractsoffer to purchase piece of real estate without obligation to buythis contract gives potential buyer right to purchase property of seller at some time in futurespells out time frame (1-3 year) optioneepotential BUYER How Can a Contract Be Terminated If the Optionor (Seller) Breaches the Agreement?-refusing to sell to buyer who porperly exercises right to buy-cancelling option early without buyers consent-selling to someone else - then new owner will be bound by the option and buyers can enforce option against new owner Can an Optionee (Buyer) Ever Be Obligated to Exercise the Option to Purchase?yes. under terms of contract.Example - if building permit or zoning change is aquired (by contract) then buyer may be obligated to prchase property unilateral contract (this is what option contracts are)only one waygives the buyer right to buy property BUT does not require Who uses an option contract, and when do they use it?common that options are attached to lease. allows renter option to purchase prop at end of lease term or within contract time frameAKA LEASE OPTION OR LEASE WITH

AN OPTION TO BUY

option feebuyer must pay this to seller, which can be for any amount that both parties agree toif buyer decide not to purchase prop, then seller gets to keep option fee and sell to someone else What happens if the optionee decides to exercise the option? (buy house) then binding contract between 2 parties is created and both parties must fulfill obligations optionorseller option contracts continued- usually buy time for buyer to raise money to purchase-low risk investment in undeveloped land option contract VS regular sales contract REGULAR = buyer and seller have to carry out their contractual obligationsOPTION = only seller is bound

What are the two contractual promises of an option contract?

• The optionor will not sell the property to anyone else

during the option period2. The optionor will sell the property to the optionee, if the optionee so chooses, under the contract terms and conditions.What is a real estate licensee's role in an option contract?really for attorneysbest to advise your client to seek attorney who understands option contractsWith an option attached to a lease, a landlord CANNOT increase the option amount if a better offer comes in.