One of the most commonly used agreements in the Florida real estate market is the “As Is” Real Estate Contract. This contract, provided by the Florida Realtors and the Florida Bar, outlines the terms of a property sale where the seller is not obligated to make any repairs. It is also the one often used for properties with visible issues and is required for bank owned and short sale properties.
Key Components of the “As Is” Contract
In an “As Is” real estate transaction, the seller agrees to sell the property in its current condition, without being required to make repairs or improvements. This means that once the contract is signed, the buyer is accepting the property with all its visible and unseen defects unless otherwise negotiated. Here are some key components of an “As Is” contract:
- Inspection Period. The contract typically grants the buyer an inspection period (usually 10-15 days) to conduct thorough evaluations of the property. If the buyer finds any issues, they have the right to cancel the contract without penalty within this period.
- Seller’s Disclosures. While the seller is not required to make repairs, they must still disclose known material defects that could affect the property’s value. Failure to do so can lead to legal consequences.
- Earnest Money Deposit. Buyers usually submit an earnest money deposit as a show of good faith. If the buyer backs out during the inspection period, they typically get their deposit refunded. However, if they back out after the inspection period without a valid reason, they may forfeit the deposit.
- Closing Date. The contract specifies the agreed-upon closing date, during which the transfer of ownership takes place. Buyers need to secure financing (if applicable) and finalize all necessary arrangements before this date.
- Financing Contingencies. If a buyer is obtaining financing, they need to ensure that the contract includes a financing contingency. This protects the buyer if their loan is denied, allowing them to exit the contract without financial penalty.
At our attorney-based title company, we see about 50% of our transactions using “As Is” contracts, so if you are a buyer, it would be wise to understand this type of transaction and utilize a real estate agent that is also familiar with them. It is also worth noting that when purchasing new construction, neither the standard or “As Is” contract would be used. Builders utilize a different contract that eliminates all of the “resale” topics and replaces them with jargon regarding newly occupied structures.
At The Law Office of Donna Hearne-Gousse, P.A., our staff has a great deal of experience representing both sides of “AS IS” real estate transactions, as well as extensive knowledge regarding all types of real estate contracts. We will properly guide and represent you from contract inception through closing.
The Law Office of Donna Hearne-Gousse
(561) 582-5670