The Florida Realtors and Florida Bar have created two standard types of contracts that are commonly used for purchasing residential real estate in Florida. They are:
- The FR/BAR “Standard” Contract
- The FR/BAR “As-Is” Contract
One might imagine that the FR/Bar “Standard” Contract would be more popular because under that contract, a seller must make certain repairs to the property based on the results of an inspection report. However, the FR/BAR “As-Is” Contract tends to be more commonly used in Florida. Our Florida real estate attorneys at Farshchian Law, P.A. explains five critical facts about the FR/Bar “As-Is” Contract.
- Great For Quick Sales: An “as-is” sale can benefit both buyers and sellers looking for a quick turnaround. Sellers who need funds can potentially move a property more quickly since there is no requirement to make any repairs to the property. Buyers are still entitled to an inspection period so that they can still back out of the contract if there are any major issues with the property.
- “As-Is” Does Not Mean The Seller Is Off The Hook: Despite what one might think, an “as-is” contract does not mean that the seller is not required to make any disclosures. The FR/Bar “As Is” Contract does require a seller to make certain disclosures, including whether there are any material facts that negatively impact the value of the property and are not readily observable to the buyer. The seller must also disclose any code violations that they are aware of, as well as any open or expired permits, and any improvements made to the property without proper permitting. A failure to disclose on the seller’s part can land them in hot water.
- The Buyer Does Get An Inspection Period: A buyer under the FR/BAR “As-Is” Contract has the right to perform an inspection and can cancel the contract at their sole discretion during the inspection period. The default inspection period if no other date is entered is 15 calendar days. If the inspection reveals the need for any repairs, the buyer may request a credit, ask for a price reduction, or ask for the seller to make the repairs prior to closing. The seller is not required to provide any of these concessions but may want to do so to keep the transaction from falling apart. If the seller agrees to a concession, repair, or price reduction, this change to the contract must be memorialized in a written addendum prior to the end of the inspection period.
- Paying Attention to the Timelines is Critical: It is essential to keep in mind that while a buyer has the right to inspect the property and try to negotiate a lower price if defects are found (or request a credit or for the seller to perform the repair), the seller has the right to refuse any changes to the contract. While most sellers are willing to negotiate with an interested buyer, some sellers will stick to their guns. In this situation, if the buyer does not wish to move forward, the buyer must cancel prior to the end of the inspection period to not risk their deposit.
- Difficult To Successfully Negotiate Alone: While FR/BAR “As-Is” Contracts might seem easier to interpret than “standard” FR/BAR real estate contracts, they have their own nuances and subtleties that can be confusing and counterintuitive to the average person – to say nothing of the unfortunate possibility of dealing with an unscrupulous buyer or seller. Having experienced legal help on your side can make the transaction go much more smoothly.
Call our Florida Real Estate Attorneys Today
Real estate transactions tend to be complex, whether you are buying your first home or flipping your fiftieth apartment. An experienced and proficient Florida real estate attorney from Farshchian Law, P.A. can help you understand the ins and outs of the FR/BAR contract and ensure that your real estate transaction will have the best chance possible at success. Please call us at (800) 604-1871 or email us at Info@JFRealEstateLaw.com.