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"As-Is" Versus Standard Real Estate Contract: What Brevard County Homeowners Need To Know
Dated: April 18 2022
In Florida, there are two main residential purchase contracts that buyers and sellers typically use:
- FAR/BAR "As-Is" Contract for Sale and Purchase
- FAR/BAR Residential Contract for Sale and Purchase
There are differences between these two contracts, and it's important for Brevard County homeowners to know what they are. In this article, we're looking at the difference between the Florida "As-Is" contract and the standard Florida real estate contract.
What Is The FAR/BAR Residential Contract for Sale and Purchase?
The FAR/BAR Residential Contract for Sale and Purchase is a contract used in the state of Florida to purchase residential real estate. According to this contract, sellers have an obligation to address Defective Inspection Items. Defective inspection items could include broken appliances, water damage, roof damage, mold, and pests, among other things.
It's important to note that appliances and systems simply need to be in a "working condition” under a Standard contract. For example, if an appliance is in working order but it's old or cosmetically damaged, it's not classed as a defective item.
What Is The FAR/BAR "As-Is" Contract for Sale and Purchase?
The FAR/BAR "As-Is" Contract for Sale and Purchase is another contract used in the state of Florida for residential real estate purchases. According to the As-Is contract, buyers can ask sellers to make repairs or replace parts of the home; however, sellers are not obligated to do so.
It's natural to assume that most sellers would like to sell their homes "As-Is" without being responsible for replacing or repairing anything. This is especially true if it's a fixer-upper or a property the seller knows little about, such as an inherited home.
Of course, using an "As-Is" contract does not relieve sellers of the responsibility of disclosing any known material defects that may affect the value of the home — especially issues that are not readily observable by potential buyers. Providing buyers with an honest and up-to-date Sellers Disclosure of the property's current condition (as the seller knows) is an essential part of the real estate sales process. Although Florida does not require a Sellers Disclosure to be in writing, it's a good idea to create one and have potential buyers read and sign it.
Does The FAR/BAR "As-Is" Contract for Sale and Purchase Include An Inspection Contingency?
Yes, the FAR/BAR "As-Is" contract for sale and purchase does include an inspection contingency that allows buyers to inspect the property for damage or potential issues. In an "As-Is" contract, buyers have a certain amount of time (typically 7-10 days; however, this depends on the contract) to have the property inspected and make their requests for repairs or credit.
As stated above, in an "As-Is" contract, sellers are not obliged to make any repairs. If a seller decides they do not want to make repairs, the buyer might decide to deliver a notice to end the contract and have their escrow returned.
What Florida Contract for Sale and Purchase Is the Best?
When deciding whether to accept a Standard or an As-Is real estate contract, there are several things that a seller must consider. Factors such as property condition, the estimated cost of repairs, and personal preference will all determine which contract a seller should choose. A licensed Florida real estate attorney can help sellers understand the differences between both contracts and how they relate to their specific circumstances and legal options.
It's important to remember that buyers and sellers have certain obligations they must meet regardless of which type of contract is used. A licensed and experienced real estate agent can help guide both parties through the inspection contingency period and the inspection negotiations.
If you're thinking about selling your home in Brevard County, finding out how much it could be worth is a great place to start! Click here to receive a free valuation of your property today.
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