Humber/Ontario Real Estate Course 3 Exam Practice

Is an option to purchase included under the term 'purchase'?

1. Yes, but only if it's mandatory

2. No, unless specified

3. Yes, if exercised

4. No, it is always separate

5. Yes, without conditions

6. No, only in rental agreements

The correct answer is: Yes, if exercised

An option to purchase is indeed included under the term 'purchase' when it is exercised. This means that the buyer has the right, but not the obligation, to purchase the property as outlined in the option agreement. When the buyer decides to exercise this option, it thereby transforms into an actual purchase agreement, leading to the transfer of ownership. Understanding the relationship between an option to purchase and the purchase itself is critical in real estate transactions. The option serves as a conditional right that can be activated by the buyer, making it relevant and integral to the notion of purchasing property. It's important to recognize that until the option is exercised, it remains just that—an option—but once it is exercised, it effectively completes the purchase process.