medium · National Real Estate Exam
A contract for an option to purchase real estate requires the optionee to provide 'option money' to the optionor.
How does this differ from earnest money in a standard purchase agreement?
- Option money is the consideration for the option contract, while earnest money is a good-faith deposit.
- Earnest money is always non-refundable, while option money is always refundable.
- Option money must be at least 10% of the price, while earnest money can be any amount.
- Earnest money creates a unilateral contract, while option money creates a bilateral contract.
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