There are 12 questions on the Florida real estate sales associate exam about contracts. Twelve questions! This is an important section! One of the things we need to know about contracts is what an option contract is. Today, not only do you get to learn what an option contract is, you get to learn a little bit of Orlando history from an Orlando native.
Back in the 1960s, there were three people who owned land in south Orange County. Jack Demetree owned 12,000 acres. Irlo Bronson owned 7,000 acres. And the Goldstein family owned 1,800 acres. A mysterious man came into town using a fake name. He was an attorney who represented a developer called Reedy Creek Ranch. You may have heard of the Reedy Creek Water District or Reedy Creek Fire Department. It’s Disney World.
So this attorney for Reedy Creek meets Demetree and says, “I want to buy your land.”
Demetree says, “Great. I want to sell this land.”
They agree on a price on $125 an acre. But Mr. Reedy Creek says, “Here’s the thing… if these other people won’t sell, I don’t want your property. I have to get all three pieces in order for my project to work. But, I don’t want to buy those two pieces and then have you raise the price on me. So here’s what I’m going to do…I’m going to give you $25,000 for you to take your property off the market for six months. You can’t sell it to anyone else. I want to have the option to buy it.
“In other words, if I come back in the next six months, you have to sell it to me for $125 an acre, and the $25,000 counts toward the purchase price. If I don’t come back in six months, you can keep the $25,000 as payment for your troubles. How does that sound?”
Well, we know how Demetree answered that question. We also know that Disney ultimately exercised their option.
That’s all there is to it. That’s what an option contract is. In my next post, I’ll write a few more details about an option contract that you need to know for the Florida real estate sales associate exam.
Please note that neither I, nor anyone in the Climer family, have any affiliation with Climer School of Real Estate. My father, Ron Climer, sold Climer School of Real Estate in 2014. You can find me at Demetree School of Real Estate. If you are looking for me, want to take a real estate class with me, or want to learn more Orlando history, call me at 407-493-3974.