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17 JAN



The Sales Contact Explained

Traditional FloridaBar-1 Contract

The primary differences between a traditional FloridaBar-1contract and an As-Is contract revolve around three of these paragraphs. Paragraph 12C of the contract deals with wood destroying organisms. Wood destroying organisms include wood rot, termites, and other pests which can damage a home. To summarize the paragraph, it says that if, after the contract has been signed by both parties, the buyer has a licensed inspector or Florida certified pest control operator review the property and find wood destroying organisms then the seller will be responsible for paying to get rid of the pests and correcting any resulting damage caused by the infestation. It also provides for a maximum amount the seller will have to pay (typically 1.5% of the purchase price).

Since the seller will probably have to correct the problem regardless of who the buyer is, and since the seller is obligated to disclose the fact that the wood destroying organisms exist, it is likely that they will go ahead and have the pests dealt with anyway. However, this solution allows for an out for both buyer and seller in various situations.


As-Is Contract

An As-Is contract is effectively an alternative to the rules listed in paragraphs 12 of the traditional contract. In fact, if you look at either of these paragraphs in an As-Is contract, they will show “DELETED”. Instead of the strategy outlined above, an As-Is contract includes a broader inspection period. The inspection period can be set for any period of time and is typically up to 10 days for a residential contract. During that time the buyer should have any inspections performed that they feel are necessary. That includes a traditional home inspection, a pest inspection for wood destroying organisms and anything else that they feel is important. Here’s the kicker: at any time during the inspection period, the buyer “in the buyer’s sole discretion” can determine that they are not satisfied with the results of the inspections and can cancel the contract.

Common misconceptions

First, it is important to understand that buying a house is not like buying something at a garage sale. An As-Is sale does not mean that the seller can hide known damage from a buyer. A seller is required by Florida law to disclose all known defects that could materially affect the value of the house. A seller who withholds valuable information can be held liable for his actions regardless of whether the transaction is conducted “As-Is”.

There is no such thing as “selling As-Is”. Also, an advertisement can say that a home is being sold As-Is. However, a buyer can submit any offer. Further, it is the duty and responsibility of a listing agent to forward any offer that is presented. So, a buyer can submit an As-Is offer on a home that has not been listed As-Is. Likewise, a traditional offer can be submitted for a home that has been advertised As-Is. By way of example, a seller who is trying to sell her home for $400,000 As-Is may get two offers. One for $350,000 on an As-Is contract and another for $400,000 on a traditional contract. The seller could determine that selling As-Is is not worth $50,000 and accept the larger dollar amount. The seller could also make a counter offer to the higher contract and include an As-Is rider if she feels very strongly about it. At the end of the day, marketing a house as As-Is is a request from the seller to the buyer as to the type of offer she would like to see.



As a buyer, there is a certain amount of comfort in submitting an As-Is contract. Because of the inspection period, there is an absolute out during the term of the inspection period. In fact, by putting up a deposit and entering into an As-Is agreement with a seller, the buyer has effectively placed an option on the purchase of the house for the term of the inspection period and for the cost of any interest lost on the deposit. As a buyer, this gives an opportunity to become intimately familiar with the property while being sure that the terms of the contract will not be adjusted and that the seller will not sell to someone else. Therefore, despite the stigma that comes to mind when a buyer hears “As-Is”, it is typically a good way to go.

For a more in-depth explanation of the contracts, and our conclusions and recommendations, find our full guide here.

Posted in Real Estate Tips on January 17, 2022 at 8:58 am.


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