There are two main types of contracts in use in Florida. The 'As-Is' and the 'Standard'. The two types of contracts are basically identical with one major difference. The difference is in the way these two contracts handle inspections and repairs. The 'As-Is' contract basically gives the buyer a negotiated time period the default is 15 days to inspect the property and either take it 'As-Is" or decide against the purchase. The seller is not obligated to make any repairs.
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However, not all standard forms are created equal, and there are crucial differences between them. There is a common but mistaken tendency to assume that these two short words denote that a property is in poor condition and that the seller just wants to get off their hands. It is in fact one of the most common standard contracts used in Florida.
If there is a discrepancy between the two inspections and the parties cannot come to an agreement, then the contract will have both parties share the cost of a third inspection, the results of which will be binding on both parties.
If the buyer decides they no longer want the property, they can notify the seller prior to the day inspection deadline and cancel the contract without penalty.
Davis duty to disclose, after the Florida Supreme Court case which imposed the duty on all sellers of Florida real estate. Which Contract is Better? Neither contract is objectively better than the other: it all depends on the nature of the transaction and the type of property involved. We will determine whether your interests are adequately protected before you sign.
She specializes in drafting, reviewing and negotiating leases, purchase contracts, deeds, and other real estate-related documents; handling title issues; and representing lenders, buyers and sellers in the conveyance of commercial and residential real estate. Call for a Consultation Jennie Farshchian. This field is for validation purposes and should be left unchanged. Search Search for:.
“AS IS” Contract vs. FAR/BAR Standard Contract
For residential real estate purchases, there are 2 different contracts used in the state of Florida. All agents would agree that the main difference between the two contracts is the inspection contingency. 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. Negotiations can still be made though between buyer and seller in terms of credit, repair or price reduction during this time. 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.
Q & A: What's the Difference Between a FARBAR As-Is and Standard Contracts
As a result, the contract contains many of the same provisions typically found in other standard real estate agreements used in Florida. Rather, one of the reasons the contract was created was to ensure that people involved in real estate transactions in Florida have access to a reliable and legally binding agreement. However, even though a member of the public can use the FAR-BAR contract in a real estate sales transaction, in most cases a person is better served seeking professional assistance in such a situation. The fact is that even with a well-crafted FAR-BAR contract prepared by legal and real estate professionals, a real estate sales transaction is a complicated matter. There are often terms and contingencies that should be drafted by an experienced real estate attorney.