What is a Put Option vs. Call Option in Real Estate?
Put and call options are used so parties can enter into an agreement to sell or purchase real property in the future for a particular price. The agreement provides the buyer with the option to purchase the property and the seller with the option to sell the property.
Put and Call Options in Real Estate
Put and call options have a wide range of uses, including for property and succession planning, although the focus of this article will be on their use for real property. In essence, put and call options are an extremely useful method over property transactions. These allow parties to enter into agreements to sell or purchase property at a future point in time or on the occurrence of an event, whilst requiring very minimal commitment upfront.
Simply put, rights afforded under a put and call option are a future right to oblige a seller to sell land (known as the ‘call option’) or a buyer to buy land (known as ‘put option’). ‘Put and call options’ jointly provide both parties the right to oblige the other party to buy or sell the property…
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