When it comes to financing contingencies, what's better for the seller? The FAR or FARBAR contract?

By
Services for Real Estate Pros with ADDvantage Real Estate Services

When it comes to financing contingencies, what's better for the seller? The FAR or FARBAR contract?

Flat fee sellers often represent themselves. While not advisable, I believe most flat fee sellers do represent themselves in contract negotiations.

Realtors, being licensed professionals, typically know more about sales contracts than FSBO un-represented flat fee sellers.

The most common reason that a real estate transaction fails is financing issues.  The following briefly describes the differences in the two with regard to financing contingencies:

FAR (Florida Association of Realtors) contract gives the seller an advantage because the onus is on the buyer to provide the seller with written notice within the "finance commitment period" that the buyer has successfully obtained "loan approval/commitment" or the buyer will forfeit the deposit.

Note: FAR contracts favor buyers.

FARBAR (Florida Association of Realtors & the Florida Bar) contract puts the onus on the seller to notify the buyer of their intent cancel contract by providing buyer with a "Seller's Cancellation Notice" within 7 days of the closing and allowing buyer 3 days to remove the financing contingency or cancel the contract and receive a full refund of all deposits.

The FARBAR contract allows the buyer to get a refund of all deposits even if they provide the seller with a pre-approval letter. Anything short of a "Loan Commitment" from the lender allows the buyer to escape the contract unscathed.

Note: FARBAR contracts favor sellers.

There's more to sales contracts and negotiating tactics then what was presented in this short blog. Consider listing flat fee in the MLS with a program that is cost effective but that also offers sellers contract-to-close representation by a licensed broker that has 25 years of experience in Florida real estate.  Our flat fee ADDvantage Plus program for $799 plus $150 at close offers this and much more.

 

See ADDvantage Plus flat fee MLS Listing for more details

Comments (1)

Doris Freeman
Reliant Realty - Gallatin, TN
Broker/Agent, Realtor

I do not think that a flat fee is good for anyone, buyer, seller or agent, I always think about the old saying "You Get What You Pay For"

Have A Great Day

Jun 06, 2008 09:37 AM