For residential real estate purchases, there are 2 different contracts used in the state of Florida. There is the FAR/BAR “As-Is” Contract for Sale and Purchase and the FAR/BAR Residential Contract for Sale and Purchase (more commonly known as the “Non As-Is” Contract to us agents). Both are approved by the Florida Association of Realtors (FAR) and the Florida Bar Association (BAR). Neither is right or wrong to use, it all just depends on your brokerage preference and your customer’s preference! Let’s dig in and discuss the main differences to help you be as prepared as possible when submitting an offer for your customer.
All agents would agree that the main difference between the two contracts is the inspection contingency. With the “As-Is” Contract, your buyer is given an inspection period (pg 5 lines 249-262, the length of which can be determined in negotiations but is typically around 10 days) in which they can conduct any physical, permit and public record inspections they would like. Due to any inspection results or for personal reasons, your buyer can still cancel the contract at any time during the inspection period and be entitled to a deposit refund. This contract does state that the home is sold in “as-is” condition with no repairs required, which means that the seller is not required or obligated to make any repairs or give credits, but can elect to. Negotiations can still be made though between buyer and seller in terms of credit, repair or price reduction during this time. If a seller remains steadfast that the property is “as-is” and your buyer can not accept it in its’ current condition, then buyer may cancel prior to the end of the period. Once the inspection period has ended, the buyer forfeits the right to cancel and be entitled to their deposit. This period is a type of safety net for your buyer, and it is the more common contract used today in our area. This contract also protects your seller against having to make repairs as well. The shorter the inspection period, the better it is for your seller so that if things cancel, the home was off the market for the shortest time possible before going back on.
With the “Non As-Is” Contract, your buyer is still given an inspection period (pg 5 line 261-268) but your buyer may not necessarily cancel for any reason. There are paragraphs in this contract (pg 3, 5-7) associated with different repair caps a seller is responsible for making, and all of this is negotiated and determined prior to getting under contract. The 3 categories of repairs are “General Repair Items”, “WDO Repair Items” and “Closing Out or Obtaining Permits”. A maximum monetary amount is set for each category that a seller is responsible for, so seller has already agreed to make said repairs found in an inspection so long as they are requested by buyer during the period, up to that amount for each. Any amount over that predetermined amount, seller is not required to expend funds. If seller is unable meet the general ongoing maintenance or repair requirements in the contract, then 125% of the estimated repair amount will be escrowed for out of the seller proceeds and repairs will be made using those funds, any overage is returned to the seller. During the inspection period if buyer does not deliver a list of repair requests to the seller, then the buyer waives their right to have seller make any of the repairs and will proceed with the purchase of the property as is. If the repairs required are more costly than the repair caps and a solution can not be reached, buyer or seller may elect to cancel the contract and release each other of any further liability, with buyer entitled to a deposit refund.
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