I just attended a seminar to help Key West Realtors under stand the new residential real estate purchase contracts. These are the forms approved by the Florida Bar Association and the Florida Association of Realtors which allow Realtors to put together transaction agreements without the help of a lawyer. Many times over the years contracts have been tweaked, a few improvements here and there but, this time it was a major overhaul. The contract to purchase went from five pages to eleven. I guess it reflects the momentous changes in the real estate industry.
Here are some of the highlights. The first major change is the words "collected funds" running through out the form when it is time for money to be paid. This pretty much means "wired funds". Personal checks have never been acceptable for the purchase of real estate, but now the "bank check" or the "cashierâ€TMs check" seems to be falling by the way side with the speed of which banks and mortgage companies are doing the same.
Another reoccurring concern is unpermitted improvements and the existence of open permits. The contract now states "Seller does not know of any improvements made to the Property which were made without required permits or made pursuant to permits which have not been properly closed" There is nothing new about owners trying to do work on their property without a permit, but in signing the new purchase agreement he guarantees that he has no knowledge of it. Open permits have become the newest headache. For some reason for years contractors of all types often never closed out a permit after installing a roof, pool, central a/c, etc. Many owners have no idea they have open permits on their property often from previous owners. This is now an issue with many title companies who will not issued title insurance until the permits are closed. The Buyer or the Seller must go through a process with the City of Key West to resolve it. The new contract provides for how and when this is handled.
The last significant change is the one that I am particularly happy about. It reads in bold "BUYER AGREES TO RELLY SOLEY ON SELLER, PROFESSIONAL INSPECTORS AND GOVERMENTAL AGENCIES FOR VERIFICATION OF PROPERTY CONDITION, SQUARE FOOTAGE AND FACTS THAT MATERIALLY AFFECT PROPERTY VALUE AND NOT ON THE REPRESNTATION (ORAL, WRITTEN OR OTHERWISE) OF BROKER."
It is about time the Realtor has some form of protection for conditions of the property that he or she had no way of knowing, not being an engineer or contractor and having to rely only on information from the seller. It also recommends a buyer get tax and legal advice again not relying on his real estate agent.
So, get your open permits closed, be prepared that funds will be required to be wired to closing, get a home inspection and forget about going after the real estate agent should you discover something wrong with your property after closing. Yeah!
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