What type of contract ties up a property for future buyer decisions?

An option to buy contract is a unique type of agreement that gives a prospective buyer the right, but not the obligation, to purchase a property at a predetermined price within a specific timeframe. This arrangement effectively ties up the property while allowing the buyer time to consider their decision, conduct due diligence, or secure financing.

During the option period, the seller cannot sell the property to anyone else, creating a degree of security for the buyer. This type of contract is particularly useful in real estate as it provides flexibility; if the buyer ultimately decides not to purchase, they can simply let the option expire, often losing only a small fee put down at the outset rather than undertaking the full commitment involved in a sales contract.

In contrast, other types of contracts listed, such as a lease agreement and a rental contract, are primarily concerned with temporary possession and use of the property rather than tying it up for future purchase decisions. Meanwhile, a sales contract obligates both buyer and seller to complete the transaction, leaving no room for the buyer to decide against purchasing once signed.