Florida Real Estate Practice Exam

Sanjeev leases a house from Clara, and the lease has an option contract attached that permits Sanjeev to buy the house if he chooses to exercise the option within three years. How large does the option fee need to be in order to be legally binding?

1. 10% of the purchase price

2. 1% of the purchase price

3. Any amount agreed to by the parties

4. At least $1,000

The correct answer is: Any amount agreed to by the parties

An option fee is a nonrefundable amount of money paid by the potential buyer to the seller to secure the option to purchase the property at a future date. In this case, since the amount of the option fee is not specified in the lease agreement, any amount agreed upon by both parties would be legally binding. Options A, B, and D may be considered too specific and may not be agreed upon by both parties, making them incorrect. Option C is the most general and flexible answer, making it the correct choice.