2025 has already started with exciting contract updates, setting the stage for more changes this fall! Effective December 31, 2024, Florida Realtors and The Florida Bar released key updates to the “AS IS” Residential Contract For Sale and Purchase and the Residential Contract for Sale and Purchase. The updates apply equally to both contracts and focus on three main sections:
- Section 9: Closing Costs, Fees and Charges
- Section 15(a): Buyer Default
- Section 19: Addenda
Section 9: Who Pays What? Updates to Closing Costs & Fees
This section was updated to specify that buyers and sellers would be responsible for the cost related to their respective “Closing Services.”
Closing Services refers to services performed by a licensed title insurer, title insurance agent or agency, or attorney agent including, but not limited to:
- Preparing documents necessary to close the transaction
- Conducting the closing
- Handling the disbursing of funds related to the closing in a real estate closing transaction where a title insurance commitment or policy is to be issued
Previous Rule: The party selecting the Closing Agent often paid for all closing services, regardless of which side of the transaction they were on, sometimes leading to unexpected expenses outside of that party’s control.
New Rule: Each party now covers their own Closing Services costs, providing more transparency and control over expenses.
Section (15a): Buyer Default – What Realtors Need to Know
Previously, the contract included language that allowed the portion of the Deposit (if any) paid to a Listing Broker in a Buyer Default situation to be split between the Listing Broker and the Cooperating Broker. However, this language has been removed..
What This Means:
- Distribution of any deposit funds in the event of a default is now governed by specific compensation agreements rather the contract itself.
- Compensation agreements will vary, making it crucial for realtors to understand the terms before signing.
Pro Tip: Whether you represent a Buyer or Seller, carefully review your compensation agreement and clarify the specific circumstances under which you may or may not be entitled to compensation in the event of a default. This will ensure there are no additional surprises if a deal doesn’t close as expected.
Section 19: Addenda Updates – New Buyer Broker Compensation Clauses
This section has been updated to include the reference to Addenda FF (“Credit Related to Buyers Broker Compensation”) and Addenda GG (“Sellers Agreement with Respect to Buyers Broker Compensation”). These additions allow parties to present an offer contingent on an agreed upon method of Buyers Broker Compensation may be paid, if not paid in full by the Buyer.
Key Takeaway: When using these addenda, ensure that each applicable box is checked to incorporate them into the contract properly.
Stay Ahead of 2025’s Real Estate Contract Changes
While these changes are relatively minor, understanding them ensures you are prepared to navigate the market confidently with your buyers and sellers.
Have questions about these updates or any other real estate matter? Contact your local, trusted real estate attorney today.
