Greg Boan | Associate Broker
(561) 251-6887 direct or text
greg@seasideluxhomes.com

The Real Estate Sale Contract and Communication:

The Real Estate Sale Contract and Communication:

Nothing could be more important than an agent’s communication with their Buyers or Sellers throughout a real estate transaction process. I always remind buyers and sellers, “The devil is in the details” and it’s true. The moment important deadlines or other contractual obligations are missed, misunderstood or overlooked consequences can occur. Often not good ones. Florida real estate law and Florida “Contract for Sale and Purchase” agreements (contracts) are much different than what many folks from other states may be accustomed to, especially in some northeast states where closing dates and other time lines can automatically be pushed out or otherwise modified over and over without breeching the sale contract. Not so in Florida. It is incumbent upon the real estate professional to clearly communicate to their clients the specific contractual obligations contained within the purchase and sale contract then manage the contract deadlines throughout the entire process assuring these responsibilities are met on time. It is also important parties to the contract read and understand all the important elements within the contract and be aware of the “gotcha’s”. I highlight and review these items with my customers right up front.

The primary difference between Florida’s contracts and those of some other states is Florida’s contracts are “Time of the Essences” with mandatory time fence obligations that must be met when due otherwise the non-compliant party to the contract may be in default. This is where people can encounter difficulties such as breeching the contract, losing a property under contract, even forfeiting deposits or law suits.

“Time of the Essences” simply means, just that. Any time period milestone spelled out within the contract MUST be fulfilled on time by the responsible party before that time period lapses. No exceptions *unless the parties mutually agree via a written addendum to extend the compliance time before the expiration of the time period. This should not be done with a nod or a handshake as contracts are not enforceable if not in writing.

Some examples of contract time periods:

  1. Offer response period: If not met on time, the offer is considered withdraw or expired.
  2. Deposit submission period: If not met on time, contract in default. Applies to 1st, 2nd or other deposits.
  3. Inspection Period: If not completed within specified days the inspection is waived and by default the buyer accepts the property AS IS and right to cancel contract or request repairs/compensation, waived.
  4. Apply for financing within usually 5 days of Effective Date: Failure to do so results in default but more importantly may delay closing, another default.
  5. Loan Approval period: Usually 30 days. Failure to do so results in default but more importantly may delay closing, another default. Or the contract cancelled by the seller. Extensions requires an addendum mutually agreed by the parties. *A clear of conditions Loan Approval is required to close the transaction.
  6. In Florida a contract for purchase of a condominium can be cancelled within 3 days of the effective date without cause. If missed, the contract goes forward and cancellation rights are negated.
  7. Title Commitment period: Usually due no later than 5 days before closing but negotiable. Failure to obtain may result in a default but more importantly may delay closing and if title is not clear it will impair closing completely.
  8. Closing date: This is the big one. Buyers and Sellers must be willing and able to close the transaction as per the closing date. Failure to do so results in a default with ugly consequences for the party in breach of contract.

In practice, and I should qualify that with “from my experience”, only a small percentage of buyers or sellers actually read the entire residential sale contract. That is why it is incumbent upon their real estate professional to guild them through the entire process with acute attention to their client’s responsibilities.

 
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