The right to purchase property at a set price within a defined period, without obligation to buy, is known as what?

• A. Option contract
• B. Mortgage
• C. Lease option
• D. Purchase agreement

Answer: (A)

An option gives the holder the right, but not the obligation, to buy property at a predetermined price within a defined time frame. That exactly matches the described scenario: you have the right to purchase at a set price during a specified period, but you’re not required to buy. The option holder may choose to exercise the right, in which case a sale occurs under a separate contract; if they don’t exercise, the option expires. This differs from a mortgage (a loan secured by the property), a lease option (an option to buy tied to a lease with ongoing rent), and a purchase agreement (a binding promise to buy). So the correct term is an option contract.