Most Miami-Dade residential property transactions use the Florida Realtors/Florida Bar Contract for Sale and Purchase — the “FAR/BAR contract” for short. This is a fillable form that can be prepared by real estate brokers, attorneys, investors or actual parties to a deal. The FAR/BAR contract uses commonly understood language that is meant to make sales and purchases simpler and less open to contention. However, its provisions have been revised from time to time to address various issues of interpretation and application. The most recent set of revisions went into effect on November 1, 2021.
The numerous new revisions affect both the standard and “as is” versions of the FAR/BAR contract and their riders. Here are some of the most important changes:
- Loan approval — In Paragraph 8(b), which conditions a sale on a buyer qualifying for a sufficient mortgage loan, the term “loan approval” is amended to mean not only that the buyer is approved for the financing described in the contract but also that the lender has received a satisfactory appraisal if one is required. The term also includes a lender’s condition that the buyer must sell another property if a specific rider is attached to the contract.
- Loan approval period — The FAR/BAR contract now requires that the buyer’s lender receive a satisfactory required appraisal before the “loan approval period” expires. Under the prior version, a low appraisal might cause the transaction to fall through as late as the closing date. Now, the seller will receive earlier notice that the deal is not viable, which can allow the property to be put back on the market.
- Delivery of notices — In addition to mail or personal delivery, notices between parties and their agents now may be sent by fax or email. However, the new form eliminates the availability of other electronic media, such as instant messaging or texting, since those communications can disappear and leave no lasting record that a notice was delivered.
- Buyer’s disclosures — A buyer now has an obligation to keep the seller informed of the status of a loan application, appraisal, loan approval and property-related conditions, provided that the seller requests this information in writing. In addition, a buyer must disclose any existing or intended seasonal or short-term vacation rentals that will extend past the closing date.
There are many other changes to the FAR/BAR contract that may impact your Miami-Dade transaction. Whether you are a seller or a buyer, you are better off having the contract reviewed by a qualified Florida real estate lawyer who can explain its provisions and propose additions and deletions designed to best protect your interests. Before signing a contract, make sure there is a clause that makes the deal subject to attorney review.
Based in Miami, Norma Echarte & Associates represents buyers and sellers in real estate transactions clients throughout South Florida, including Fort Lauderdale, West Palm Beach and Boca Raton. Please call 305-501-2844 or contact us online to schedule a meeting.