Contract to Close

Think of every step up until this point as practice and now you’re playing in the big game. Preparing to list and accommodating showings certainly require effort, but the contract is the first part of the process that introduces hard deadlines and expectations on your part. Florida has some unique differences in its standard real estate contract compared to some other states, but the biggest is that “Time is of the essence.” This means that the date specified in the contract for each individual requirement is a hard deadline, not an approximation. Because these deadlines are generally open for negotiation, there is no order in which they must occur, but there is a natural progression that they almost always follow.

 

The first deadline is for the receipt of the earnest money deposit. This is usually set for only a few days after the contract effective date. This money is held in escrow by a third party as a measure of the buyer’s entrance to the contract in good faith. This is often low on a seller’s radar but it is your means of financial recompense if the buyer defaults, so we stay on top of it and inform you when it is accounted for.

 

The next deadlines also mostly pertain to the buyer but we monitor them for you to ensure that they happen in a timely manner. These deadlines are the buyer’s application to the condo or homeowner’s association (if there is one) and the buyer’s application for financing (if the purchase is being financed). These deadlines both generally fall within five days of the contract acceptance date and are important to keep track of in order to prevent closing delays. Additionally, if you have a recent survey on hand as the seller, you are expected to provide that document to the buyer within five days of an accepted contract. This allows the lender time to determine whether the existing survey is sufficient or if a new one needs to be ordered without causing financing delays.

 

Once these initial tasks are completed, the next deadline is the property inspection period, which normally lasts for a week or so. Florida’s standard contract is an “As-Is” agreement with right to cancellation, which means that sellers are not required to make any repairs or remedies to the property but buyers are similarly allowed to withdraw from the agreement at any time and for any reason during this period. Once the contract is accepted, your buyer will most likely contact and schedule a licensed Florida property inspector within the first day or so who will come and perform a series of inspections on all aspects of your property and provide the buyer with a detailed report. Because of the “As-Is” nature of the Florida contract, buyers generally prepare a list of items that they wish to be repaired and sellers decide which items they are willing to repair or credit, then the contract is amended to reflect that this work will be completed prior to closing. Expect buyers to move quickly here because once the inspection period ends they are strictly bound to the remainder of the contract. We will always be present for your home inspection and will assist you through the repair negotiations.

 

The final standard deadlines are the financing contingency period and the title evidence provision. The financing contingency period generally extends thirty or fewer days from the date of an accepted contract (remembering that the buyer is expected to have applied for this financing within the first five days of the contract) and is the last major piece of the closing puzzle in a financed transaction. The appraisal value of the home is often what dictates financing approval, which is why we have our agents attend every appraisal and provide pricing rationale.