How Do You Read a Florida Purchase Contract?

The Standard Florida Contract: What It Is and Why It Matters

Florida uses two primary residential purchase contract forms developed jointly by Florida REALTORS and the Florida Bar:

• The “AS IS” Residential Contract for Sale and Purchase — The most commonly used form. The seller makes no obligation to repair anything, but buyers retain the right to inspect and cancel during the inspection period for any reason.
• The Standard Residential Contract for Sale and Purchase — Less common. The seller agrees to maintain the property in its current condition and may be obligated to make repairs up to a negotiated dollar limit.

In Sarasota and Manatee County practice, the AS IS contract is overwhelmingly preferred by sellers and is standard in the vast majority of transactions. Understanding this form thoroughly protects buyers from common pitfalls.

Section-by-Section Breakdown of the Florida AS IS Contract

1. Purchase Price and Deposit Structure

The contract specifies the full purchase price, the initial deposit (due within 3 days of effective date, typically 1–3% of price), and any additional deposit (due after the inspection period expires, often bringing total deposits to 5–10%). The escrow holder is named — almost always the title company or closing attorney.

Critical detail: deposits are generally non-refundable once the inspection period has expired, except in specific circumstances spelled out in the contract (financing failure, title defects, etc.).

2. Closing Date

Florida contracts specify a closing date — typically 30–45 days from acceptance for financed transactions, potentially shorter for cash deals. The contract includes provisions for extensions if financing or title issues arise, but extensions require mutual agreement. If a party can’t close by the specified date without an extension, the other party may have remedies including cancellation or claiming damages.

3. Inspection Period (Critical for Buyers)

This is arguably the most buyer-protective provision in the Florida AS IS contract. The standard inspection period is 15 calendar days from the effective date (the date both parties have signed). During this window, buyers can:

• Order any inspections they wish (home, septic, mold, wind mitigation, 4-point, roof, etc.)
• Cancel for any reason and receive their deposit back
• Request repairs, credits, or a price reduction based on inspection findings

After the inspection period expires, canceling the contract typically results in forfeiture of the deposit to the seller (with some exceptions). Never let the inspection period expire without making a conscious decision to proceed.

4. Financing Contingency

If you’re obtaining a mortgage, the contract includes a financing contingency. If your loan is denied through no fault of your own and you properly follow the contract’s notification procedures, you may be entitled to receive your deposits back. The contingency typically expires a set number of days before closing — after which you’re expected to close regardless of financing status.

This is why getting a solid pre-approval (not just pre-qualification) before making offers is essential. A lender who issues a pre-approval letter that later doesn’t hold up puts your deposit at risk.

5. Title and Closing Costs

Florida buyers and sellers each have customary closing cost responsibilities. In Sarasota and Manatee Counties, the seller customarily pays for the owner’s title insurance policy — though this is negotiable. Buyers typically pay for their lender’s title policy, recording fees, and loan-related costs. Your agent will outline who pays what in your offer.

The contract also specifies how title will be conveyed (warranty deed) and sets standards for title search, clearing of liens, and acceptable title exceptions.

6. Property Condition, Disclosures, and Addenda

The Florida AS IS contract requires sellers to disclose known material defects — facts that would affect the value or desirability of the property to a reasonable buyer. However, the AS IS structure means sellers aren’t obligated to fix what they disclose. Buyers must factor disclosed issues into their inspection-period decision.

Common addenda include:

• Condominium/HOA rider (required for all HOA transactions)
• Flood zone disclosure
• Lead-based paint disclosure (for homes built before 1978)
• Seller’s property disclosure (not required in AS IS but often provided)
• Financing addendum with specific loan terms

Key Deadlines You Cannot Miss

Florida contracts are deadline-driven. Missing any of these can have serious financial consequences:

• Initial deposit: Due within 3 business days of effective date
• Inspection period end: Typically day 15 — your last chance to cancel without penalty
• Additional deposit: Due at inspection period end (or as specified)
• Loan approval deadline: Usually a set number of days before closing
• HOA/condo document review period: 3 days after receiving documents to cancel
• Closing date: Must close by this date or risk default

A competent agent tracks every deadline for you and sends reminders — this is not optional service, it’s core to the job.

What Happens If Something Goes Wrong?

If the buyer defaults (fails to close without a valid contractual reason), the seller’s typical remedy is to retain the deposits as liquidated damages. In some cases, sellers can pursue specific performance — forcing the buyer to complete the transaction — though this is less common.

If the seller defaults (refuses to close or backs out without justification), the buyer can pursue return of their deposits plus potentially sue for specific performance or damages.

This is why working with a real estate attorney for review — or at minimum understanding every clause before signing — is strongly recommended for complex transactions.

What To Do Right Now

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