What is an option to purchase?

An option to purchase is a type of contract commonly used in residential real estate law in South Carolina. It gives the buyer an exclusive right to purchase a property at an agreed-upon price during a specific period of time. The seller offers the option to purchase to the buyer in exchange for an upfront fee, called an option fee, that the buyer pays to the seller. If the buyer decides to exercise the option to purchase the property during the specified period, the option fee is considered part of the purchase price and is usually credited to the buyer at closing. If the buyer does not exercise the option to purchase within the specified period, the option fee is typically forfeited and the seller retains it. The buyer does not have any obligation to purchase the property and is under no legal obligation to do so. However, if the buyer fails to exercise the option to purchase, the seller can keep the option fee and the buyer loses the exclusive right to purchase the property at the agreed-upon price. When signing the option to purchase, it is important for both parties to carefully review all of the terms and conditions of the contract and consult their legal advisors. An option to purchase is a legally binding agreement and can have serious financial and legal consequences if not acted upon properly.

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