The Florida Association of Realtors uses two different versions of the purchase and sale agreement. One is called " FAR (Florida Association of Realtors)" the other " FAR BAR" (Florida Bar Association). In different parts of the state, real estate agent communities have their own customs as to which version they use. In my Destin FL area, for example, the FAR contract is more common. But a few towns over, in Pensacola, the FAR BAR is prevalent. Now the Florida Association of Realtors is proposing to combine both contracts and make further changes. The decision whether to proceed with the new contract will be made on August 23, during the FAR Annual Convention & Trade Expo. I have reviewed the 21 proposed changes and sent my comments in to my board at the Emerald Coast Association of Realtors. You should do the same, as your input is requested.
Here are my thoughts on the changes:
1. Paragraph 1. d. I find it odd that personal property check boxes include “shed” and other items that might be potentially removed, but don’t include “Window Coverings ”. The new version states window covering automatically stay. If the contract is taking the stance on questioning items that typically stay, like a shed, it should do the same with window coverings for the sake of consistency
2. 125% escrow for repairs not completed – implies that buyer MUST close if repairs are not done by seller . As a buyer, I would be leery to close – what if the air conditioner did not work? Close anyway? Wait six months for the seller to repair? It might never be repaired, as the money sits in escrow. Forcing a buyer to accept that term is far too much micro-management of a contract between buyer and seller. I would line it out if I were representing a buyer. This should be removed from the contract. Ditto to RISK of LOSS provision, which also forces the buyer to accept the property after fire or other casualty, and just accept an escrow until repairs are made.
3. If seller has a title policy, he shall provide a copy to buyer and closing agent within 5 days . Most sellers have one, but can they find it? Most cannot find all their paperwork, so the seller would be in default of the contract if he couldn’t find it. It would be “nice” if they provided it, but to stipulate it in the contract is excessive and not realistic. Remove this requirement.
4. If the seller has a survey, to provide to title agent within 5 days . I suppose that could cause issues if a seller has one, but cannot find it. VERY typical… Thus buyer could claim seller is in default… if they don’t comply. This should be removed.
5. Define “financial failure” of lender … The new contract version says a buyer can get his deposit back if the closing is not funded due to "financial failure" of his lender. I can see a situation where funds didn’t make it to closing on time, so hypothetically, the lender failed financially. This needs to be more clear. Lender “out-of-business” or something more specific should be used here. Another example, a bank was taken over or merged. That might also fit the definition of “financial failure”- but in essence, the closing could still be funded. That might be used as an excuse for a buyer not to close.
6. Change to closing to occur on or BEFORE closing date as mutually agreed . This comes up again and again. Otherwise, the contract says closing must occur ON an exact date.
7. Remove same county closing restriction We often have closings one county away. It should state, “unless otherwise agreed between buyer and seller.”
Finally, ONE POINT that is mentioned nowhere in our Florida purchase and sale agreement- Buyer or Seller shall pay a per diem penalty should they not meet the closing date. Other states have that, and I believe it is the cause of sloppy closing date adherence in Florida.
What are your observations on the new Florida real estate contract proposal?
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Destin Short Sales & Pre Foreclosure Help.
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