What is an Option Clause in a real estate contract?

An Option Clause in a real estate contract is an agreement between a buyer and seller that gives the buyer the option to purchase the property at any time before a set date or for a set amount of money. The clause outlines how long the buyer has to exercise the option and for what amount of money. In Alaska, an Option Clause is generally enforced by a court when both parties agree that it is legally binding. This means that if the buyer fails to purchase the property before the expiration of the option, the seller may be able to sue the buyer for breach of contract. It is important to note that an Option Clause is different than a Deposit. A Deposit is money that the buyer pays to the seller when they enter into the Agreement of Purchase and Sale as a show of good faith that they intend to fulfill the requirements of the agreement. An Option Clause, on the other hand, does not require a buyer to pay money upfront, and is only an agreement allowing the buyer to purchase the property before the expiration of the option.

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What is an Option Clause in a real estate contract?

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