Understanding the Florida FAR/BAR 'AS IS' vs. Standard Residential Contract: Which Should You Use?
The Florida AS IS contract allows buyers to cancel for any reason during the inspection period. In contrast, the Standard contract obligates the seller to make repairs up to a set percentage, which can complicate the closing process.
Navigating Florida Real Estate Contracts
Buying or selling a home in Florida involves navigating complex legal paperwork. Whether you are closing on a condo in Miami or a single-family home in Orlando, almost all residential transactions rely on forms approved by the Florida Realtors and The Florida Bar. The two most common forms are the Standard contract and the 'AS IS' contract. Understanding the difference between these two documents is critical to protecting your deposit and avoiding lawsuits. If you are unsure which contract to sign, browsing our US Lawyer Directory to find a local real estate attorney is a highly recommended first step.
The Standard FAR/BAR Contract and Seller Repair Limits
The standard Form 6, Florida, Florida Realtors, Residential Contract for Sale and Purchase is often viewed as more buyer-friendly, though it can create headaches for sellers. Under this agreement, the seller is legally obligated to address certain property defects discovered during the inspection.
However, the seller's financial obligation is not unlimited. The contract includes specific repair limits, usually defaulted to 1.5% of the purchase price for general repairs, 1.5% for Wood-Destroying Organisms (termites), and 1.5% for closing out open permits. If the cost of repairs exceeds these limits, the seller does not have to pay the excess. At that point, the buyer can either pay the difference, or either party can cancel the contract. This back-and-forth negotiation often stalls closings and can even lead to litigation in courts like the Miami-Dade County Circuit Court, Miami.
Why Most Buyers and Sellers Prefer the 'AS IS' Contract
To avoid arguments over who pays for a broken water heater or a missing roof shingle, the vast majority of transactions in Florida use the Form ASIS-6, Florida, Florida Realtors, AS IS Residential Contract for Sale and Purchase. The term 'AS IS' means the seller is not obligated to make any repairs whatsoever. What you see is what you get.
The 15-Day Inspection Period
While an AS IS contract sounds risky for buyers, it actually provides a massive safety net. The contract defaults to a 15-day inspection period (though this timeframe is negotiable). During this window, the buyer has the absolute, unconditioned right to cancel the contract for any reason. If you hire an inspector and decide the home needs too much work, you simply provide written notice before the deadline, and your earnest money is fully protected.
Waiving the Right to Request Repairs and Earnest Money Refunds
It is vital to understand how waiving your repair requests impacts your money. Because the seller is not required to fix anything under an AS IS contract, a buyer cannot demand repairs as a condition of closing. You can certainly ask for a price reduction or a seller credit, but the seller can simply say no. If the buyer decides to proceed past the inspection period without canceling, they waive their right to back out based on the home's condition. If the buyer later tries to cancel because of a leaky roof after the inspection period expires, the seller can claim a breach of contract and keep the buyer's earnest money deposit as liquidated damages.
How Much Does a Real Estate Lawyer Cost in Florida?
Hiring an attorney to review your contract or handle your closing provides immense peace of mind. Costs generally include:
| Cost Type | Estimated Amount |
|---|---|
| Contract Review Fee | $300 to $600 |
| Title Search and Examination | $150 to $350 |
| Closing/Settlement Fee | $500 to $1,000 |
| Litigation Retainer (if a dispute arises) | $2,500 to $5,000+ |
How Long Does the Closing Process Take?
In Florida, a typical residential closing takes between 30 and 45 days. Cash deals can close much faster, often in 14 to 20 days. The timeline is heavily dependent on the buyer's mortgage lender processing the loan. If a contract dispute arises and requires litigation in a local court, such as the Hillsborough County Circuit Court, Tampa, resolving the issue can stall the transaction for several months.
Frequently Asked Questions (FAQ)
Does an AS IS contract mean the seller can hide defects?
No. Even under an AS IS contract, Florida law requires the seller to disclose any known material defects that are not readily observable to the buyer. Concealing problems like a past sinkhole is illegal.
Can I negotiate the 15-day inspection period?
Yes. The 15-day timeframe is just the default printed on the standard form. In highly competitive markets, buyers often shorten this period to 7 or 10 days to make their offer more attractive to the seller.
Who holds the earnest money deposit?
The deposit is usually held in a secure escrow account managed by a neutral third party, such as a title company, a real estate brokerage, or a Florida real estate attorney.
What happens if the appraisal comes in low on an AS IS contract?
If the contract includes a financing contingency, a low appraisal might allow the buyer to cancel and recover their deposit if the lender denies the loan. However, if it was a cash deal without an appraisal contingency, the buyer must make up the difference or risk losing their deposit.
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