What is an "option contract" in real estate?

An option contract in real estate is a specific type of agreement that gives the buyer the exclusive right, but not the obligation, to purchase a property at a predetermined price within a specified timeframe. This agreement typically involves a payment made to the seller, known as an option fee, which secures the buyer's right to make the purchase decision later. The components of an option contract provide flexibility to the buyer, allowing them to assess the property, secure financing, or conduct due diligence before committing to the purchase.

In contrast, agreements to lease a property, contracts guaranteeing repairs, and mandates to sell property immediately do not encapsulate the essence of an option contract, which centers around the right to purchase rather than the obligation to either lease, repair, or sell the property. Thus, the nature of an option contract distinctly focuses on the purchasing rights it provides, aligning with the identified correct choice.