What is a property option?

A financial derivative that represents a contract sold by one party to another party The contract offers the buyer the right, but not the obligation, to buy or sell a security or other financial asset at an agreed-upon price during a certain period of time or on a specific date.

It refers to an option to purchase real estate and when recorded in the land records creates an encumbrance until it is released by the parties, extinguished by time or the terms are carried out by a sale.