In a housing sale in Florida, an As-Is Contract is used about 90% of the time. There’s another contract that is used other than the As-Is which we’ll discuss in a different segment, but the As-Is contract is the most common use of a contract. Sellers think it’s great when they hear As-Is because they think it means they don’t have to do anything; and in other states that may be the case, but in Florida, the As-Is contract really favors the Buyer. The reason it favors the Buyer is because of the clause that’s written in there stating that the Buyer and Seller have to agree upon an inspection period. The inspection period is typically 10 days, although the standard is 15 days.
The clause in the contract reads:
“If Buyer determines, in Buyer’s sole discretion, that the Property is not acceptable to Buyer, Buyer may terminate this Contract by delivering written notice of such election to Seller prior to expiration of Inspection Period. If Buyer timely terminates this Contract, the Deposit paid shall be returned to Buyer, thereupon, Buyer and Seller shall be released of all further obligations under this Contract”.
The key words in there are ‘sole discretion’. What this means is that the Buyer can go out and write 100 contracts tomorrow, full price offers on homes, have all 100 accepted, and just give notice the next day that they’re canceling, as long as it’s within that agreed upon 10-or 15-day period. The Buyer is out and it’s just at their sole discretion. There is nothing the Seller can do at this point, so the Buyer’s deposit is refunded and the Buyer is out of the contract. They can put one home under contract and if another home they like better becomes available, they can cancel the contract and buy the other home. They also can try to renegotiate the contract during that time if they find results that are not so satisfactory in the inspection. So if you’re a Buyer, we normally recommend writing up an As-Is contract and using it, and if you’re a Seller, just be aware of what the contract entails. What we do try to do on the selling side is to limit the period down closer to 7 days if we can, because the less the period, the less the chance that the deal is going to fall apart.