Real Estate Call Option is sold as a “European Call”, means that it has to be hold till the expiration date and can only be exercised at the expiration of the contract. If the property owner sells the property that is used to value the call before the end of the term, the investor requires a fair compensation. In order to fairly compensate the investor, the strike price is adjusted backward and the calculated payout is based on the adjusted strike price. The adjusted strike price is calculated based on the given Real Estate Call Option price at the time of origination discounted by an average rate of return for the property to the date of the recall.

A detailed example of Real Estate Call Options payoff is presented here.

Real Estate Put Option is sold as an "American Put" - means that is can be exercised anytime before the expiration date.

A detailed example of Real Estate Put Options payoff is presented here.