Q: A real estate contract can be a complicated document containing multiple time periods (i.e., loan approval/commitment periods, inspection period, title review period, etc.). I’m worried that in the event my customer asks me to modify a time period, I may be creating some form of legal ambiguity in the contract. Does Florida Realtors® have any form that might aid us in making these modifications to time periods?
A: The Extension Addendum to Sale and Purchase Contract, or EA-2, available on Florida Realtors Form Simplicity™, gives members a quick, easy way to modify common contractually defined time periods. Simply check the box (or boxes) for the time period(s) you wish to modify and have the addendum executed by the parties. Your concern about creating legal ambiguities is always a challenge associated with a contract modification. As always, if you are concerned about the proper way to modify a contract, refer your customer to a legal professional for assistance.
Q: I represent a buyer who’s in the middle of a divorce and who’s scheduled to close on a house before the divorce is final. She alone qualified for the financing, and she’s taking title in her name only. The lender is insisting that her soon-to-be-former husband sign the mortgage agreement. Why?
A: The mortgage agreement gives the lender the right to foreclose if the borrower defaults on the loan. However, a spouse who hasn’t signed the mortgage agreement may be able to assert homestead rights, making it difficult for the lender to foreclose. So, if property could be considered the buyer’s homestead, most lenders will require the non-owning spouse to sign the mortgage agreement for the sole purpose of waiving homestead rights. Therefore, it’s a good idea for the mortgage to include language stating that the spouse is signing only to satisfy the spousal joinder requirement contained in the Florida Constitution and that the spouse is not assuming any liability or obligations in the note or mortgage. In addition, the non-owning spouse should always review the mortgage agreement carefully to ensure the terms are consistent with his or her understanding.
Q: I’m representing a buyer who made an offer to purchase a residential property. The offer gave the seller three days to accept the offer. The buyer no longer wants to purchase this property and wants to withdraw the offer. The seller hasn’t accepted the offer, and there are two days left until the time-of-acceptance period expires. May the buyer withdraw this offer?
A: Yes. An offer may be withdrawn any time prior to acceptance, even if the time-of-acceptance period hasn’t expired. The withdrawal may be done by verbal or written communication; however, a written withdrawal is recommended.
Q: I represent a short sale seller who executed the Florida Realtors/Florida Bar ASIS-1 with a buyer along with the accompanying Short Sale Rider (CR-1 G). The seller’s lienholder stated that it will approve the buyer’s contract, but that it is requiring the parties to close by a certain date. Should the parties include this new closing date in an addendum to the contract?
A: Yes. if the seller’s lienholder and the seller need to close by a certain date, the two parties must mutually agree to this change for it to be incorporated into the contract. One party may not unilaterally change the contract terms.
Q: My buyer made an offer, and the seller made a counteroffer. My buyer countered the seller’s counteroffer, and the seller rejected it. Now, my buyer wants to go ahead and accept the seller’s original counteroffer. May he?
A: No. The buyer’s counteroffer served as a rejection of the seller’s counteroffer. Since the seller’s counteroffer was rejected it may no longer be accepted.
Q: I have a listing for a residential bank-owned property (REO). The property is in a community with a mandatory homeowners’ association (HOA). Is the disclosure summary for the community required to be part of the sale and purchase contract if the property is bank owned?
A: Yes. Section 720.401(1)(a), Florida Statutes, provides that when a residential property is located in a community with a mandatory HOA, the sale and purchase contract shall refer to and incorporate the disclosure summary. There’s no exception for bank-owned properties. In addition, Section 720.401(1)(c), Florida Statutes, provides that if the disclosure summary is not provided to a buyer before he or she executes the sale and purchase contract, the buyer may void the contract. This must be done by delivering written notice to the seller or the seller’s agent within three days after receipt of the disclosure or prior to closing, whichever occurs first. Both the Florida Realtors® CRSP-12 Homeowners' Association Addendum and the Florida Realtors/Florida Bar Homeowners’ Association/Community Disclosure rider (CR-1 B) contain the required disclosure summary.
Q: Is a Seller’s Real Property Disclosure form required?
A: No. Although the form itself is not a legal requirement, the seller still has a duty to disclose to the buyer all known facts not readily observable that materially affect the value of the property. Although the seller may make this disclosure verbally, Florida Realtors attorneys recommended that it be made in writing.
Q: My buyer made an offer on a property, but the seller has not accepted the buyer’s offer. May the buyer withdraw his offer?
A: Yes. The buyer may withdraw; however, his withdrawal must be done prior to the seller’s acceptance.
Q: I’m representing a customer with an executed contract. The contract has inconsistencies between the preprinted provisions and the handwritten addendum. The handwritten addendum is in direct conflict with some of the preprinted terms on the contract. Which terms will govern?
A: Handwritten and typed terms will generally prevail over preprinted terms that are in direct conflict.
Q: I represent a buyer with an executed Florida Realtors/Florida Bar Contract For Residential Sale And Purchase or Florida Realtors Contract For Residential Sale And Purchase contract. My buyer is working with his lender but needs some additional time to secure his financing. Should I ask for an extension to the closing date to make sure that my buyer has enough time to get his financing?
A: Not only do you need to request that the seller grant an extension for the closing date, but it’s recommended that you also request an extension to the financing contingency term. Extending the closing date doesn’t automatically extend the buyer’s time in which to obtain financing. Generally, a contract that’s contingent on financing includes a timeframe during which the buyer can apply for and secure financing. Depending on the contract’s terms and financing contingency, buyers may risk losing their escrow money if they aren’t able to secure financing before their financing contingency term expires.
Q: My seller has received offers from several buyers. She now wants to counter all of them in writing. Is this allowed?
A: While a seller is permitted to counter, in writing, more than one offer at the same time, doing so is not advisable. If the seller counters in writing more than one offer and each counter is accepted before the seller is able to communicate an intent to withdraw her counter to one of the buyers, the seller could be bound to multiple written contracts and thus have potential liability to those buyers.
Q: How does a buyer assign his or her rights in a sales contract to another party?
A: Buyer 1 (assignor) and Buyer 2 (assignee) should enter into a written Assignment of Agreement, which should be drafted by one of their attorneys.
Q: The buyer in a transaction is a Navy SEAL. The buyer entered into an contract with a seller to buy a home in Florida. Prior to closing, the buyer received permanent change of station orders from his commanding officer, transferring him to California. May the buyer terminate the contract?
A: Yes. Section 689.27(2)(a), Florida Statutes, provides: “Any service member may terminate a contract to purchase property, prior to closing on such property, by providing the seller or mortgagor of the property with a written notice of termination to be effective immediately, if . . . the service-member is required, pursuant to permanent change of station orders received after entering into a contract for the property and prior to closing, to move 35 miles or more from the location of the property.”
Either a copy of the official military orders or a written verification signed by the service member’s commanding officer must accompany the notice.
Q: A seller who listed her home with me notified me today that she is terminating her listing agreement. She claims that under Florida law she has a 72-hour right of rescission. I’ve been in the business for some time and haven’t heard of any such law. Does the seller have a 72-hour right of rescission?
A: There is no Florida law that affords the seller such a right of rescission. Therefore, unless the listing includes a provision giving the seller such a rescission right, the seller isn’t entitled to cancel without incurring potential liability to the broker.
Q: Does Florida law mandate that the real estate closing take place in the county where the real property is located?
A: No. However, many contract for sale/purchase forms include pre-printed provisions indicating where the closing must take place.
Q: I represent a buyer who made an offer on a For Sale by Owner (FSBO) property. I asked the seller to provide written confirmation of her decision to reject the buyer’s offer, but she refused. Isn’t the seller required to provide written confirmation of her rejection upon request?
A: No. There is no law that requires either party to communicate in writing his or her decision to reject the other’s offer.
Q: After entering into a contract for sale/purchase with the seller, the buyer decided that he’d rather close in March than on the January 30 closing date contained in the contract. We sent an addendum requesting an extension of the closing date to March 1, but the seller rejected our request. Do we still have an enforceable contract?
A: Yes. The fact that the parties failed to reach a meeting of the minds on a proposed modification doesn’t affect the enforceability of the existing contract.
Q: I have a listing that was only on the market a couple of days when three offers came in from three buyers. The seller accepted one of the offers. Now, the broker who represents the buyer whose offer arrived first claims my seller had an obligation to negotiate with his buyer because his offer was presented to the seller first. Is this true?
A: No. There is no Florida law that would require the seller to respond to any offer. Additionally, there is no Florida law that requires the seller to negotiate with each buyer in the order in which the offers were received.
Q: If a seller makes a counteroffer to the buyer’s offer, may the seller later revoke the counteroffer and accept the buyer’s original offer?
A: No. When a counteroffer is made, the buyer’s original offer is terminated and can no longer be accepted.
Q: My buyer submitted an offer on a house, and the seller accepted it yesterday. The buyer has changed his mind, and feels that because the house is in a mandatory homeowners’ association that there is a three-day rescission period in which he can cancel without incurring liability. The seller provided the buyer with the “Disclosure Summary” pursuant to Section 720.401, Florida Statutes and the contract also complies with Section 720.401 requirements. Does the buyer have a three-day right to cancel?
A: No. Unless the contract includes a provision giving the buyer three days to cancel, the buyer would not have such a right.
Q: On one of my listings, a buyer (“Buyer 1”) submitted an offer, and my seller counteroffered. While the seller was awaiting Buyer 1’s response, another buyer (“Buyer 2”) submitted an offer. May the seller withdraw his counteroffer to Buyer 1 before the time for acceptance specified in the counteroffer?
A: Yes. An offer/counteroffer may be withdrawn at any time prior to its having been accepted in accordance with the contract form’s term. This is true even if the time of acceptance contained in the offer/counteroffer has not expired.
Q: Is my seller required by law to accept a full-price offer?
A: No. There is no Florida law that would require the seller to accept any offer.
Q: I’m a single agent for a buyer and have written an offer using the Florida Realtors Contract for Residential Sale and Purchase contract form. The seller’s single agent is telling me that his brokerage prefers the Florida Realtors/Florida Bar Residential Contract For Sale And Purchase form and that they won’t present the offer to his seller. May they do that?
A: It depends. Section 475.278(3)(a), Florida Statutes, provides that a single agent must present “all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.” Therefore, if the seller has previously directed his or her single agent in writing that he or she shouldn’t be presented with any offers written on the Florida Realtors contract form, then it would not be a violation for the seller’s single agent to refuse to present it to the seller. If the seller hasn’t so previously directed his or her single agent in writing, then the agent must timely present the offer.
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