What is an option to purchase?

An option to purchase is an agreement between two parties in which one party has the right, but not the obligation, to purchase a property in the future at a set price. In the state of Massachusetts, an option to purchase is a useful tool for potential buyers to demonstrate their commitment to purchase a property while also ensuring that the terms of the purchase are beneficial to them. The buyer is not obligated to purchase the property, but if the option is exercised, the seller must honor the agreement and sell the property at the price stated in the option. Options to purchase are often used when a buyer is unable to negotiate an agreement with the seller or when a buyer is not in a financial position to commit to the purchase of a property. The option to purchase locks in a price for the property and also provides a non-refundable deposit that indicates the buyer’s commitment to the purchase. The option to purchase is also beneficial for a seller, as it provides an assurance of a sale in the future, regardless of any changes in the market or increases in property value. When an option is exercised, the seller is also assured of receiving a certain amount of money that is set in the original agreement. In Massachusetts, options to purchase are typically drafted and reviewed by a lawyer in order to ensure the agreement is properly structured and includes all relevant terms and conditions. It is important to note that an option to purchase is often not legally binding unless it is documented in a deed or other legally binding document.

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What is an option to purchase?

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