National Real Estate Practice Exam

Which term represents the party granting an option in real estate?

1. Optionee

2. Optionor

3. Mortgagor

4. Mortgagee

The correct answer is: Optionor

In real estate, the term that represents the party granting an option is referred to as the optionor. This is the individual or entity that provides the right for another party, known as the optionee, to purchase or lease a property at a specified price within a defined period. The optionor essentially gives the optionee the privilege to make a decision later on, which can be beneficial for both parties in a transaction. Understanding the roles of optionor and optionee is crucial in real estate transactions involving options. The optionor retains ownership while offering an opportunity for the optionee, who may not yet be ready to commit to a purchase, to secure the property without the immediate financial obligation of buying. This arrangement can provide flexibility and strategic advantages in real estate dealings.