As a real estate investor and broker in Florida since 2002, I have seen my fair share of mistakes investors and real estate agents make using Florida Real Estate Contracts. Unfortunately, this causes stress, conflict, potential legal problems, and distrust amongst all parties if you don’t know the basics of the Florida Real Estate Contract.
I will take you through an entire FAR BAR AS IS Florida Real Estate Contract in this article. This is the most commonly used Florida Real Estate Contract the Florida Association of Realtors attorneys created. We will also cover frequently asked questions about Florida Real Estate Contracts.
If you decide to sell your property to us, we will use the same Florida Real Estate Contract below. I also have a detailed video breaking down the AS IS Florida Real Estate Contract below. So, let’s dive in!
Other Investor Florida Real Estate Contracts
A quick warning… As mentioned, I have been in the business since 2002. I have trained thousands of real estate agents over the years. I have also seen many types of Florida real estate contracts and can honestly say I would be very weary if it isn’t a FAR BAR AS IS contract.
We have bought properties from home sellers who had a contract with another investor who ultimately wasted their time. Some sellers have no idea if they are still in a binding agreement after they didn’t close on the scheduled date. Some sellers are pressured into extending the contracts too. Be sure to watch the video below for more info on this…
The main warning here before we proceed is to demand any investor you work with to use a FAR BAR AS IS Florida Real Estate Contract.
Common Questions Pertaining to Florida Real Estate Contracts
Before we get into the actual FAR BAR AS IS Florida Real Estate Contract, I want to cover some common questions we receive…
What are the Two Types of Florida Real Estate Contracts?
There are two main Florida Real Estate Contracts that Florida REALTORS use. PS. Keep reading along and I will provide you a FREE PDF Download of both of these Florida Real Estate Contracts.
FAR BAR AS IS Florida Real Estate Contract
The residential FAR BAR AS IS Florida Real Estate Contract is the one I prefer to use is. This is the one we will break down, section by section below. This contract is beneficial for both the seller and the buyer.
This Florida Real Estate Contract allows the buyer a certain amount of time for inspection / due diligence. The amount of time is negotiable. It allows the buyer to back out for any reason during this time period. It also allows them to request repairs to be completed by the seller, maybe a credit and renegotiation of price.
The great thing here is the seller has options. They can say no, take it for what we originally agreed on, or take a hike. Or the seller can negotiate further.
*FAR stands for Florida Association of REALTORS.
FAR BAR STANDARD Florida Real Estate Contract
The standard residential Florida Real Estate Contract can obligate a seller up to a certain amount for repair costs, as shown in the screenshot below.
Where things can get messy on the Standard Florida Real Estate Contract, here are the actual repair costs… Buyer/investor could get “inflated” bids for, say, a plumbing job that should cost $4,000, and then provide you a bid for $18,000. It happens all the time! They are just trying to beat you down to get a better deal here ultimately.
PS, if you want to deal with a reputable real estate investor here in Florida, submit your information below, and we will be happy to talk with you and figure out a no-obligation solution for you and your family.
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Who Prepares a Florida Real Estate Contract?
Well, the good thing about the Standard Florida Real Estate Contract and the AS-IS Florida Real Estate Contract is that both were written by Florida Attorneys.
So, really, any buyer, seller, or attorney can “fill in the blanks.” **Disclosure – I am not a real estate attorney. Any information in this article or on this site shall not be construed as legal advice. If you have legal questions about the Florida Real Estate Contract, please consult with the appropriate party.
What Makes a Florida Real Estate Contract Legal and Binding?
A Florida real estate contract, like contracts in many other jurisdictions, requires certain elements to be legally binding. Understanding these elements is crucial for both buyers and sellers to ensure a smooth and legally enforceable real estate transaction in the state of Florida.
- Offer and Acceptance: The foundation of any contract is the mutual agreement between the parties involved. In real estate transactions, this is typically manifested through an offer from the buyer and an acceptance from the seller. A valid offer and acceptance are established once both parties have agreed on the terms.
- Consideration: For a contract to be legally binding, there must be something of value exchanged between the parties. This is known as consideration. In real estate transactions, the consideration is usually the purchase price. The buyer and the seller must provide something of value for the contract to be valid.
- Legal Purpose: The purpose of the Florida Real Estate Contract must be legal and not in violation of any laws. This means the agreement should not involve illegal activities or go against public policy.
- Competent Parties: To be legally binding, the parties entering the contract must be competent and of legal age. In the context of real estate, this means that both the buyer and the seller must be mentally sound, not under the influence, and legally capable of entering into a contract.
- Definite Terms and Conditions: A valid real estate contract must outline the terms and conditions of the agreement in a clear and definite manner. This includes details such as the property description, purchase price, closing date, and any contingencies agreed upon by the parties.
- In Writing: While oral contracts may be enforceable in some situations, real estate transactions in Florida generally require a written agreement to be legally binding. This is often in the form of a purchase and sale agreement, which outlines the deal’s specifics.
- Compliance with Formalities: Real estate contracts in Florida may have specific formalities and requirements that must be met. For example, certain contracts, such as those involving the sale of real property, may need to be recorded in the public records to be legally effective.
Understanding and adhering to these elements is crucial for ensuring the legality and enforceability of a Florida real estate contract. Parties involved in a real estate transaction are often advised to seek legal guidance to navigate the complexities of real estate law and to draft contracts that fully comply with the applicable legal requirements.
Can a Seller Accept Another Offer While Under a Florida Real Estate Contract?
In Florida, real estate transactions are typically governed by a contract that outlines the terms and conditions agreed upon by the buyer and seller. Once an owner has entered into a Florida real estate contract, they are generally obligated to abide by the terms specified in that contract. However, the ability of a seller to accept another offer while under an existing contract can depend on the specific terms outlined in the agreement.
Most standard real estate contracts include a provision known as the “time is of the essence” clause. This clause stipulates that the parties involved must perform their obligations within a specified timeframe. If the contract contains a provision allowing the seller to entertain other offers while the buyer is given a specific period to fulfill certain conditions, the seller may have the option to consider alternative offers during that timeframe.
However, if the contract lacks such a provision or explicitly prohibits the seller from accepting other offers during the contract period, the seller is generally bound by the terms of the existing agreement. Accepting another offer in violation of the contract could lead to legal consequences, including potential legal action by the initial buyer.
It’s crucial for both buyers and sellers in Florida real estate transactions to thoroughly review and understand the terms of the contract before signing. Consulting with a real estate attorney can provide valuable insights into the specific rights and obligations outlined in the agreement and help avoid potential legal complications.
Does a Florida Real Estate Contract Need to be Notarized?
In Florida, a Real Estate Contract does not necessarily need to be notarized to be valid. While notarization is not a legal requirement, it can provide an extra layer of assurance that the individuals signing the contract are who they claim to be.
Upon a successful closing, the sellers will have documents that need notarization. PS… If you end up selling to us, we have the title company hire a mobile notary for you in the event you are not in the area for closing.
Can a Seller Back Out of a Legally Binding Florida Real Estate Contract?
In Florida, once a real estate contract is deemed legally binding, both the buyer and seller are generally obligated to fulfill the terms and conditions outlined in the agreement. It’s crucial for both buyers and sellers to thoroughly review and understand the terms of the contract and any applicable contingencies to determine the circumstances under which a seller can legally back out of the agreement in Florida.
Understanding the FAR BAR AS IS Florida Real Estate Contract
Again, this is for information purposes of a Florida Real Estate Contract. This is not legal advice and one should seek out an attorney for questions pertaining to real estate law / contracts.
Page 1 of the FAR BAR AS IS Florida Real Estate Contract has the basic info about buyer names, seller names, and property address/info.
Lines 21 and 24 are important to lay out what is and isn’t included in the sale. Line 27 is your purchase price and the line below it is how much money is held in escrow. All this means is that the buyer is putting a good faith estimate and will deposit it with the title company named on the left side. **This is so very important!! I see these other “investors” do one or some of the following. They put $0 or a very small amount. And some never submit the deposit to the title company. Be sure you demand receipt of this with the title company. If they don’t deposit, it could be a breach of contract.
Line 39 is the amount the buyer intends to finance if they were to get a mortgage. **We are cash buyers. Line 43 is the final sum of taking the top line (27) and subtracting all the lines underneath to show the balance to close not including closing costs.
Line 45 is the date (and can add time) for the time of acceptance. So if we wrote an offer for your reply by Wednesday and you reply Thursday, that offer is voided due to the expiration date.
Line 53 is the date for when closing takes place. This is when the buyer will fund and take possession of the property (unless agreed otherwise), and you get your money from the sale. Check 72 if the property is subject to a lease.
Line 83-85 is important as you will want to know if the investor intends on assigning the contract. I did a more in-depth video on this in under 5 minutes below on assignable contracts.
Lines 88-133 explain whether this contract is cash or contingent upon getting financing. The buyer has an additional out on the contract if they have it contingent upon getting a mortgage. This can include a back-out for a low appraisal, bad credit, or lack of income.
Lines 135-154 on break down the closing cost obligations from each party. We often pay all the closing costs, including doc stamps on the deed and title insurance. Also, there are no commissions or fees from us.
If we pay for all closing costs, this will be written in additional terms on page 12 spelling it out.
Lines 154-180 explain that the contract is contingent upon obtaining a title search and insurance policy confirming the property transfers to the buyer without any encumbrances.
This also provides the option of who pays for title on lines 168 and 172.
Lines 188 – 202 discuss special assessments. Disclosing any special assessments accurately to prospective buyers is very important.
These are very common in condo and homeowner associations for deferred maintenance items. But this can also include certain utilities from local municipalities.
Essentially you have a choice for the buyer to assume any outstanding balances or the seller to pay it off in full at closing.
204-255 has all the standard Florida disclosures like Radon Gas, Permit Disclosure, Mold, Flood Zone and others.
Starting at line 260, this is your buyer’s timeline to back out, renegotiate, or proceed as is. This is their inspection period. I have seen many investors put an extraordinary amount of time here, thus allowing them plenty of time to find a real investor with the cash to buy it.
Unfortunately, many of these amateurs incorrectly value the property, give the seller an overvalued price on their house (giving false hope for a high price), and later find out that no investor will take the property at a high price.
They then contact you to cancel the contract or give a new price…
These sellers reach out to a real investor like us to give them an honest, strong contract for purchase.
Line 588 – All the disclosure addendums can be attached to the contract.
These addendums are all prewritten by the FAR BAR attorneys to accompany the Florida Real Estate Contracts.
Line 590 – The additional term section lays out any additional agreements.
Be aware!! Anything outside of the plug-and-play information can get you into trouble when one starts writing in to “play attorney.”
And lastly, the signature page. This is where all parties sign and date. Remember when the last person initials/signs final agreements/changes is the “effective date.”
This is the date you want to base all timelines on.
FREE Florida Real Estate Contract Downloads
As mentioned, below you will find the sample FREE download PDF’s for both the FAR BAR AS IS Florida Real Estate Contract and the FAR BAR Standard Florida Real Estate Contract. You can easily download and they are printable. As always consult with an attorney for any legal advice.
FAR BAR AS IS Florida Real Estate Contract
FAR BAR Standard Florida Real Estate Contract
Other Florida Real Estate Contracts
There are several other FAR BAR Florida Real Estate Contracts and forms. This includes but not limited to Vacant Land, Real Estate Listing Agreement, Florida Commercial Contract, Exclusive Right Contracts, Buyer Broker Agreement, Contract to Lease and sales contract as well all the associated addendums.
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