What is an exercise of option?

An exercise of option is a legal term used in North Carolina property law to refer to a situation in which the right of a person or business to buy a piece of property is triggered. It is usually an agreement between two parties, called the "optionee" and the "optionor", that gives the optionee the right to purchase a piece of property at an agreed-upon price, at a certain point in the future. The optionee may retain this option for a set amount of time, usually no more than one year, and during this time, the optionor cannot sell the property to anyone else. When the option period expires, the optionee may then "exercise" the option by paying the agreed-upon price and officially purchasing the property. The exercise of option is a common practice in North Carolina’s real estate transactions, allowing an optionee to buy a piece of property before it is available for sale on the open market. It also helps protect both the optionor and the optionee from future changes to the property’s value. By agreeing to purchase the property at a set price, the optionee knows they will not be affected by any sudden spikes in the property’s market value.

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