What is a defining characteristic of an option contract?

An option contract is defined by its core characteristic, which is that it grants the buyer the exclusive right to purchase a property at a predetermined price, within a specific time frame. This feature is crucial as it provides the buyer with a degree of security and flexibility; they can decide whether to execute the option without the obligation to do so until the end of the option period.

During this time, sellers are unable to negotiate the sale of the property to other potential buyers, effectively restricting their options. This structure benefits buyers who may need time to finalize their financing, conduct due diligence, or assess market conditions before committing to the purchase. The clear terms of a set price and defined period make option contracts particularly valuable in real estate transactions, allowing both parties to understand their rights and obligations clearly.