Contract Negotiation & Preparation

What types of form contracts are commonly used in Florida real estate transactions? The most common form of contracts used are the FAR/BAR contract, jointly authored by the Florida Association of Realtors and the Florida Bar, and the FAR contract, written by the Florida Association of Realtors.

What are non-standard terms in a real estate contract? Non-standard terms include the purchase price, inspection deadlines, financing, closing, and any special addenda or riders that address specific circumstances not covered by the form contract.

Are signatures on the contract required to be notarized in Florida? No, Florida law does not require signatures on the contract to be notarized or witnessed.

Coordination & Task Responsibility

Who are the common parties involved in a residential real estate transaction? Common parties include licensed Realtors representing the buyer and seller, home inspectors, appraisers, lenders, mortgage brokers, title agents, and occasionally attorneys.

What are the responsibilities of realtors during the pre-closing period? Realtors keep their clients informed of the transaction status, ensure compliance with contract deadlines, subsequent negotiations (if applicable), and assist with necessary tasks like coordinating inspections and appraisals. Our job is to make the transaction go as smoothly as possible. 

What is the role of the closing agent? The duties of a closing agent include ordering title work and a property survey, communicating with the lender and mortgage broker, issuing and sending the title insurance policy to both the buyer and lender, issuing the title commitment, assembling the loan closing package, handling the closing, disbursing closing funds, and recording documents.

Buyer Responsibilities: Due Diligence, Inspections, Financing & Insurance

What is the inspection period in a Florida real estate contract? The inspection period allows the buyer time to conduct inspections of the property, typically within 10-15 days after contract execution, depending on the terms negotiated. The inspection period is the allotted time to perform their due diligence.

What types of inspections are common in Florida real estate transactions? Common inspections include complete home inspections, WDO (wood destroying organism) inspections, septic system inspections, pool/spa inspections, 4-point inspections (for homes older than 30 years), and occasionally mold testing.

What should a buyer do if inspection results reveal defects? The buyer can request the seller to fix the issues, negotiate a reduction in the purchase price, proceed with the purchase "as-is," or they have the right to cancel the contract.

What are the financing contingency deadlines in a Florida real estate contract? Financing contingency deadlines include the timeframe for applying for a loan and obtaining loan approval. These deadlines are negotiated in the contract and must be strictly observed by the buyer. Usually, the financing contingency is around 30 days.

What types of insurance are typically required by lenders in Florida? Lenders usually require hazard and flood insurance, if the property is in a flood hazard zone. Proper evidence of insurance must be provided to the lender before closing.

Title Review

What is title insurance, and why is it necessary? Title insurance protects the buyer and the lender from any challenges to the buyer's ownership rights or defects in the title. It is essential for virtually all real estate transactions.

What is a title commitment? A title commitment is a document that compiles the title search results, disclosing any liens, defects, and other issues affecting the property. It outlines the requirements to issue a title insurance policy.

What are the key components of a title commitment? A title commitment consists of Schedule A (basic transaction information), Schedule B-1 (requirements to be met at or prior to closing), and Schedule B-2 (exceptions to title insurance coverage).

Preparation/Review of Closing Documents

What is a warranty deed, and how is it different from a special warranty deed? A warranty deed provides a full warranty of title, while a special warranty deed limits the warranty to the seller's period of ownership.

What is a promissory note in a real estate transaction? A promissory note is a document in which the borrower pledges to pay the debt secured by the mortgage. It is usually provided by the lender.

What is the purpose of a bill of sale in a real estate transaction? A bill of sale transfers ownership of personal property included in the transaction, detailing the items being conveyed and their condition.

What is a closing affidavit? A closing affidavit contains statements necessary for deleting standard exceptions in the title commitment and may include a non-foreign status declaration for FIRPTA compliance.

What is a HUD-1 settlement statement? The HUD-1 settlement statement, required by RESPA, provides a detailed account of all financial aspects of the transaction. It ensures the accuracy and transparency of closing costs.

Closing

What happens during the closing of a real estate transaction? The property title and ownership are transferred from the seller to the buyer during closing. Both parties sign various documents and pay closing costs. Once closing has concluded, the buyer takes possession of the property.

What should a buyer expect during the final walk-through? The final walk-through allows the buyer to inspect the property to ensure it is in the agreed-upon condition before closing.

How are closing costs distributed? Closing costs are distributed according to the closing statement, with payments made to the appropriate parties, such as realtors, title agents, and other service providers.

What documents should be reviewed before closing? All documents in the closing file should be reviewed, including the contract, title commitment, loan documents, and any correspondence, to ensure all issues are addressed.

What are the buyer's obligations regarding closing funds? The buyer must bring the exact amount of funds required for closing, typically in the form of a wire transfer, cashier’s check, or certified check, as notified by the closing agent.