Written by: Legally Speaking

Buyer Beware — Changes to the “As Is” Purchase Contract

Real Estate in Florida is HOT! Home prices continue to skyrocket while sellers enjoy the benefits of having buyers engage in bidding wars, often receiving multiple offers above asking price. The influx of out-of-state buyers flocking to Florida ­— from New York, California, and other states, as a result of the pandemic — has caused the market to flourish. While many offers are cash, those buyers that need financing need to be careful.

Recent changes to the FAR/BAR “As Is” Contract — specifically Paragraph 8 titled Financing (lines 108 -115) — require the buyer not only to obtain a timely loan approval but to furnish the written confirmation to the seller or its agent. If written confirmation is not provided in a timely manner, the seller has the option to terminate the contract, and to keep the deposit. However, the contract does not require a written “loan commitment” but rather just confirmation of approval. If the seller elects to cancel based on the failure to provide a written loan commitment while communication of approval was provided in writing, even if by a simple email, the seller is not entitled to cancel nor to keep the buyer’s deposit.

This change in the “As Is” Contract places a lot of pressure on Realtors, who may not have the expertise necessary to legally interpret the contractual requirements for the clients they are hired to serve. That’s where the backing of a real estate lawyer is a buyer and seller’s best ally.

Having the knowledge and experience necessary to interpret real estate contracts and what is legally required of each party in a real estate contrac, will often make the difference between forfeiting a deposit or getting to the closing table. Moreover, hiring the services of a lawyer-owned title company offers even additional protection every step of the way.

Don’t go it alone. Before entering into any real estate contract, make sure you hire the services of a real estate attorney. What you pay is nominal for peace of mind!

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Tags: , , , Last modified: April 14, 2021