Section 16 Definitions

• Library: Real Estate Fundamentals 2011

American Jurisprudence (Second) defines an option to purchase real estate as a contract in which the owner of the real estate agrees with another person that the latter has the privilege of buying property at a specified price within a specified time; no obligation to purchase is imposed on the person to whom the option is given. 77 Am. Jur. 2d Vendor and Purchaser § 27 (2006).

The option does not give the optionee any ownership or property right but merely the right to acquire an interest in the property. It is a right in personam rather than in rem. Generally, when the option is exercised, a sale contract is effected, changing the...