California Real Estate Practice Exam

In an option agreement, what is the consideration?

1. The total cost of the property

2. The down payment

3. The amount paid for the right to purchase the property

4. The monthly mortgage payment

The correct answer is: The amount paid for the right to purchase the property

In an option agreement, consideration refers to the value or price paid for the right to purchase the property. This is different from the total cost of the property or the down payment, which are both part of the final purchase of the property. The monthly mortgage payment is also not considered the consideration, as it is an ongoing payment for the property rather than a one-time fee for the right to purchase.