California Real Estate Practice Exam

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Who must perform in an option agreement?

The buyer of the property
The seller of the property
Both the buyer and the seller
A witness

The correct answer is: The seller of the property

In an option agreement, the party who must perform is the seller of the property. This means that the seller is obligated to sell the property to the buyer at the agreed-upon price within the specified time frame outlined in the option agreement. The buyer, on the other hand, has the right to exercise the option to purchase the property but is not obligated to do so. This distinguishes option agreements from purchase agreements where both parties have obligations to perform. It's important to note that in this scenario, the seller is the one who must fulfill the requirements of the option agreement by selling the property if the buyer chooses to exercise the option.