The housing market is hitting record levels across the nation — and that includes Brevard County and the surrounding areas. In the past six months alone, the median sold price of homes in
As-Is Contracts in Brevard County Florida What Buyers Need to Know
Dated: April 12 2021
For many Brevard County buyers, closing on a new house is a fun experience; however, it can also be challenging. Between finding the perfect home, negotiating with the seller, and understanding the various sales agreements, navigating the real estate process can seem overwhelming. Fortunately, an experienced Florida real estate agent can help to streamline the home buying process for you.
If you're thinking about buying a house in Brevard County, there are a few things you need to know about how Florida real estate contracts work. In this article, we're going to discuss one of the most common real estate contracts utilized in Florida — the FAR/BAR "as-is" contract.
What Is a FAR/BAR "As-Is" Contract?
In Brevard County Florida, real estate agents use two typical real estate contracts; the Florida Association of Realtors (FAR) contract or the Florida Association of Realtors/Florida Bar Association (FAR/BAR) contract. The "as-is" contract is a variation of the Florida Association of Realtors/Florida Bar Association contract.
Most real estate transactions in Brevard County now use the FAR/BAR As-Is contract; however, "as-is" contracts were not always the standard. Due to the prevalence of foreclosure homes and short sales that Florida experienced during the recession, the use of the "as is" real estate contract became the norm.
As-is contracts specify that the buyer must take the property in its existing condition — or put simply, "as-is." This means that the seller is not obliged to make any additional repairs or improvements to the home. Although this may seem self-explanatory, in the state of Florida, purchasing a home "as-is" doesn't always work like that.
What Is the Inspection Period in the FAR/BAR "As-Is" Contract?
The "Inspection Clause" under Paragraph 12 is one of the most crucial aspects of the Florida as-is contract. Essentially, the agreed inspection period enables the buyer to inspect the property and decide if they still want to go ahead with the sale. By default, the inspection period lasts 15 days from the contract's effective date; however, this is often negotiated between the buyer and the seller. For example, in a strong seller's market, buyers often reduce the inspection period to make their offer appear more appealing to the seller.
Once the inspection has been completed, the buyer can decide whether they want to go ahead with the sale. The buyer may request that the seller agree to repair any issues uncovered in order to move forward with the sale. As explained, with an as-is contract, the seller is not required to make any repairs at all. An experienced real estate agent can help buyers determine the best course of action when negotiating repairs or concessions with the seller or their agent.
Alternatively, suppose the buyer chooses not to move forward. In that case, they must notify the seller prior to the agreed inspection deadline and deliver written notice of their intent to cancel the contract without penalty. In short, the "as-is" contract allows buyers greater discretion when deciding whether to proceed with the sale.
What Is the Seller Disclosure in the FAR/BAR "As-Is" Contract?
In Florida, the Johnson v. Davis case set a precedent in the Florida Supreme Court, stating that all Florida real estate sellers have a duty to disclose. The paragraph 10 disclosure of the FAR/BAR "as-is" contract states that the seller knows of no material facts that affect the property's value, which are not readily observable and have not been disclosed to the buyer. However, the seller is also not required to extend or intend any warranty and "makes no representation of any type, either express or implied, as to the physical condition or history of the Property." This is why a thorough property inspection conducted by an experienced property inspector is so crucial when purchasing a home.
How are Permits Handled in the FAR/BAR "As-Is" Contract?
Open permits can be an issue for homeowners and buyers in Florida real estate. They're usually uncovered during the property title search and can hinder a smooth closing. Open permits typically occur when a seller has previously obtained a permit to perform work on their property (open permit) but failed to have it "closed out" by the local government. According to paragraph 12 of the "as-is" contract, the seller should assist the buyer in closing out the permit; however, they are not obliged to spend any money doing so. A knowledgeable real estate agent and title rep can explain the process of successfully closing out open real estate permits.
As-Is Contract vs. Standard Contract in Florida
The as-is contract tends to be more commonly used over the standard contract in Florida real estate; however, the ideal sales contract is highly dependent on your personal circumstances. If you're thinking about purchasing a home in Melbourne or Brevard County Florida and would like to learn more about the real estate process, speak to an experienced licensed real estate agent today.
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