As real estate professionals, you are on the front lines of Florida’s real estate market. The contract you put in front of your client sets the tone for the entire transaction and often determines whether a deal closes smoothly or turns into a dispute. As we begin the new year, now is the time to revisit best practices for Florida real estate contracts to protect your clients, reduce risk, and keep transactions moving efficiently.
1. Use the Correct Contract and Treat It Like a Legal Document:
- The FAR/BAR Standard Contract and the AS IS Contract have many differences and dependent on what your client’s goals are, it is imperative to ensure you are using the correct Contract form. Refer to our blog Differences of AS IS v. FAR/BAR Standard Contract.
- Reach out to your trusted real estate attorney to draft any additional language being added to the Contract.
2. Calendar Every Deadline the Moment the Contract is Executed:
- Time is of the essence in both the FAR/BAR Standard Contract and the AS IS Contract meaning the Contracts are unforgiving when it comes to missed deadlines. It is crucial to understand the Inspection Period, Loan Approval Period, Escrow Deposit Deadline, and all other contractual deadlines.
- Make sure to clearly explain that missing a deadline can lead to contractual exposure and financial issues
- Reminder: if a deadline falls on a Saturday, Sunday, national legal public holiday, or on day which a national legal public holiday is observed because it fell on a Saturday or Sunday, shall extend to the next calendar day which is not a Saturday, Sunday, national legal public holiday, or a day on which a national legal public holiday is observed.
- Reminder: there is no 5:00pm deadline in either Contract
- Strong deadline management is one of the most valuable services you provide your clients.
3. Address Homeowner’s Insurance Early
- Think of Homeowner’s Insurance as part of the Contract, not an afterthought. Availability, cost, and coverage exclusions can impact a buyer’s ability to close.
- Utilize the Homeowner’s Insurance Rider to ensure that the Contract is contingent upon the Buyer obtaining Homeowner’s Insurance. Without it, cash buyers have no insurance contingencies.
4. Closing Does Not Mean Money In Seller’s Account:
- The closing of the Property occurs when all funds required for closing are received by the Closing Agent and are collected, as defined in the Contract, and all closing documents required to be furnished by each party pursuant to the Contract are delivered to the Closing Agent.
- Closing cannot occur without original documents in the Closing Agent’s possession.
- The Contract does not reference the seller being in receipt of funds as a condition of closing; therefore, the seller cannot withhold keys at closing until the seller proceeds arrive.
A real estate professional’s role is not just to open doors. It is to guide clients through a legally binding transaction in a complex and evolving Florida market. Strong contract practices protect your clients, your commissions, and your professional reputation.
Starting the new year with a disciplined, informed approach to Florida real estate contracts will set you and your clients up for success. If you have questions about how to best protect your clients with stronger contractual strategies, please reach out to your trusted real estate attorney.
