In today’s real estate climate, as the quantity of houses on the market diminishes, the bidding can get fierce. A seller’s market would be an understatement. If you have a house on the market, you may get tons of bids. The counteroffer dance can earn you a few more yards in the seller’s market game. Eventually, you want to come to an agreement with a buyer and accept their offer. Now things get complicated. And quick.
Short timelines put pressure on the buyer and seller to conduct required tests and produce documentation. Purchase and sales agreement language, while meant to cover both parties, can sound hopelessly incomprehensible.
Let’s unravel some of that mystery today by discussing how Florida real estate contracts work.
Provisions in a Real Estate Contract
A purchase and sales agreement basically just means a real estate contract that puts everything into writing. The contract names the people (e.g., buyers and sellers) and explicit identifying information about the property. Expect to see the property identified by both its legal description (including parcel info) and the street address.
The contract will also list anything that comes with the property like contents of outbuildings, appliances, or other equipment. Contracts list the purchase price and closing date when the sale becomes final. Then everybody signs it to make it a legally binding document.
Important note: Florida realtors contract forms don’t automatically give buyers a three-day right to cancel.
Standard Real Estate Contracts in Florida
Under standard real estate contracts, the seller has certain repair requirements within specific cost limits. As the seller, we recommend that you have your own inspection to avoid surprises when the seller gets theirs. If inspections uncover a problem equal to or less than the limit, you must have it repaired before closing.
If it exceeds that limit, you have options on how to negotiate the solution and in what manner.
“As-Is” Real Estate Contracts in Florida
Under an “As-Is” contract, sellers don’t have to make any repairs to the property once the buyer accepts the conditions. The buyer bears responsibility for fully understanding the condition of the property through inspections and other due diligence. But, under Florida housing laws, buyers can cancel a contract with “sole discretion” should the inspection uncover any serious issues.
You can always add specific contingencies into a contract with legal representation drafting the language.
Marketable Title in Florida
You’ll need to provide a Marketable Title that confirms your property is clear of any liens or title defects. Like what? Any undisclosed encumbrances like inaccurate records of ownership, outstanding judgments, or boundary disputes that can enable the buyer backing out.
Florida Estoppel Letter Requirements
You’ll also need to produce an estoppel certificate or letter if the property falls under a Homeowner Association (HOA). This letter outlines your current financial standing with the HOA, balances, current fees, and any future assessments.
Beware: these can come with hefty price tags (like north of $500 hefty) and are due upfront. If, for some reason, you can’t obtain an estoppel letter in time, you can provide a seller’s affidavit.
Power of Attorney Documentation
You can designate someone to sign on your behalf at closing through a power of attorney (POA). You’ll need a properly signed, witnessed, and notarized legal document that grants the individual very specific powers during the closing. Any POA prepped and signed outside of Florida needs your attorney to confirm its effectiveness and compliance with Florida law.
Leasing After Closing
We’ll assume if you plan to sell a current rental property, you have documentation outlining occupancy and leasing language. This will get included in the contract. Plan to pass over copies of leases and written disclosures of terms to the buyer.
Find Florida Real Estate Experts Near You
As you can imagine, this only begins to scratch the surface of necessary paperwork. Having a Florida Realtor by your side can help walk you through every step of the process. As a premier Orlando real estate sales team, The Realty Medics can help!