In Florida, 36% of homeowners sell without agents, often because FSBO homes close faster—typically in a week compared to 3 weeks with agents. The key is a well-drafted FSBO contract. However, 7% of sellers find this extremely difficult.
If you’re in this lot, don’t panic. Many Florida Flat Fee MLS services offer to review your contract for an affordable fee. This will ensure that all terms and contingencies are clearly outlined, protecting both you and the buyer.
What Is a For Sale By Owner Contract in Florida?
A For Sale By Owner contract in Florida outlines the terms and conditions of your home sale and includes contingencies, deadlines, and closing processes. It is also called a For Sale By Owner purchase agreement.
Who Draws up the For Sale By Owner Contract in Florida?
The seller draws up the purchase contract for selling a house by owner in Florida. You can even hand-draft the FSBO real estate contract and get approval from:
- A Real Estate Attorney: They specialize in real estate contracts and charge approximately $150 to $300 per hour.
- The Buyer Agent: They used to charge a 2% to 3% fee. However, after the NAR Settlement, it’s negotiable.
- A Transactional Agent: They can draft a contract without representing you in negotiations. If you hire a firm, they can charge around $350 to $500 per transaction.
Things to Include in Your Florida FSBO Contract
A well-drafted FSBO purchase agreement in Florida protects you and the buyer throughout the transaction. Ensure that the contract includes the following elements:
1. Purchase Price and Closing Details
A simple For Sale By Owner contract in Florida must mention the purchase price, down payment, and closing date. Specify who will cover the closing costs or if they will be split between both parties. Also, include contingencies if the home sale conditions aren’t fulfilled.
2. Financial Details of the Deal
Clearly state if the buyer is paying cash or opting for a loan to purchase the property. If it’s a mortgage, include the loan type, the earnest money deposit, and a timeframe for the buyer to secure the funds.
The FSBO purchase agreement should also include the option to return the buyer’s earnest money if the financing falls through. In case it’s a cash transaction, specify the minimum amount to be transferred via bank transfer or if you prefer hard cash.
3. Home Inspection Contingency
Set in place specific clauses to address any significant issues discovered during the home inspection. Also include a deadline for the inspection or any repairs if you undertake them.
For major issues, identify dealbreakers that could lead to terminating the sale, and for minor problems, mention if the sale price will be renegotiated.
4. Deed for Title Transfer
A warranty deed is the most common way to transfer a property title. To draft one, first, verify the owner’s name in official land records via the county assessor’s office. For joint ownership, decide on the title structure. At the time of purchase, the deed can be modified to include or exclude certain names.
In your FSBO contract, include the timeline for the transfer of the title. Also, specify the title company and who will cover the title insurance cost in Florida.
5. Default Provisions
Clearly outline the consequences if either party breaches the For Sale By Owner purchase agreement and specify how you will handle missed payments and delays. Also mention contingencies if the sale doesn’t close within the given timeline.
Ensure that no contingency in the contract puts you at a disadvantage. In case a contingency is triggered, you should have the option to withdraw from the agreement without penalty.
6. Seller Disclosures
Attach all relevant Florida seller disclosure forms. They contain details like the ownership history, tax status, and any known home defects. Additionally, if your property was built before 1978, submit the “Lead-Based Paint Disclosure” (addendum) along with the contract.
7. Dispute Resolutions
List arbitration or different mediation tactics as alternatives to court proceedings to resolve disputes that may arise. You can also hire a real estate lawyer to help you reach the most amicable solution.
3 Key Contingencies in a FSBO Contract in Florida
When creating a For Sale By Owner home contract in Florida, consider including these contingencies:
- Subject to Finding Replacement Property Contingency: You can cancel the sale if you can’t find a new property within the specified timeframe (e.g., 30-60 days). Avoid the crisis of renting interim housing or being pushed into a hasty purchase.
- Sale of Seller’s Current Home Contingency: You can withdraw from the sale within a specified period, protecting you from overlapping mortgages or the financial burden of owning two properties.
- Appraisal Contingency: This contingency protects you if the property doesn’t appraise for the agreed-upon purchase price. The contract may require the buyer to cover the gap, allow renegotiation, or permit termination.
What Should You Clarify in Your FSBO Purchase Agreement?
When reviewing contingencies and clauses for selling a home in Florida, be sure to clearly outline the basic elements in your contract, such as:
- Seller Name: Your name should match official records. If incorrect, the title company will not close on the property without an explanation.
- Earnest Money Deposit: The final purchase price should include an earnest money deposit. This protects you in case the buyer backs out under the wire.
- Closing Deadline: The deadline should include an exact closing date. Add dates for contingencies about financing and inspections as well.
Florida For Sale By Owner Contract Template
Source: loc.gov
**Remember: While this blog covers key aspects of a purchase contract For Sale By Owner in Florida, consulting a real estate attorney is highly recommended to ensure your Florida FSBO contract complies with all state regulations.
Ready to Draw up Your FSBO Agreement in Florida?
Even if you’re confident in your ability to create a For Sale By Owner contract that protects your interests, proceed carefully. This contract ensures legal clarity, minimizes risks, and complies with regulations. So, it’s crucial that it’s drafted accurately.
For those still unsure about handling the paperwork for selling a house without a Realtor in Florida, flat fee companies like Houzeo can help you with contract review without the hefty 3% listing agent fee.
Frequently Asked Questions
How to write a For Sale By Owner contract in Florida?
A For Sale By Owner real estate contract in Florida must include both party names, addresses, and the home's price. Additionally it should also have seller disclosures, selling timelines, financing options, etc.
How does a For Sale By Owner contract work in Florida?
A FSBO sales contract in Florida works like the traditional "Real Estate Purchase Agreement". The only difference is that the seller draws up the For Sale By Owner agreement instead of the agent. Once it's drafted, ensure that it's reviewed by a real estate attorney.
Who draws up the contract in For Sale By Owner in Florida?
The seller draws up the For Sale By Owner real estate contract. However, the seller can hire other professionals to do the job. They can be the buyer's agent or a Florida real estate attorney.
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