When listing a residential home in Florida, a potential buyer will most likely present you with one of two types of contracts: The Residential Contract for Sale and Purchase (the “Standard Contract”) or the“AS-IS” Residential Contract for Sale and Purchase (the “As-Is Contract”). The hope is that you are using one of the best listing agents who can walk you through the process to ensure you’re making an informed choice on which to accept and on what terms.
In the event you’re not working with one of the best realtors around, you may need some assistance deciphering the details. We’ll continue our Real Estate Contracts: What Do YOU Need to Know series today to help instill some professional insight on the difference between the Standard and As-Is Contracts.
As a broker and owner, I've seen the As-Is contract more commonly used rather than the Standard Contract. Most have found the As-Is to be more easily understood and navigable for all parties involved. Remember, though, easier doesn't always mean better. The As-Is contract won't always be the best contract to accept when selling your home.
The Standard and As-Is contracts are very different in pretty critical ways that make a BIG difference to you as the seller. How the contract handles obligations to the condition and the inspection of the property is at the top of the list...
Under a Standard Contract, you as the seller have repair requirements that are set-forth and binding. Compare that to the As-Is Contract, where you're only responsible for maintaining the property in the same condition that it was in as of the effective date of the Contract, and you can see quite the variance.
This is also what keeps the buyer more committed. When you willingly follow through with any repairs necessary, as described under "working condition," the buyer can't flake out without repercussions. If you own a fairly new home or one with several new updates, a Standard Contract can actually be a great option.
If that's not the case, an As-Is Contract can be more attractive because you have no repair obligations. Keep in mind, buyers have more freedom to terminate the contract if you don't agree or agree on a suitable negotiation.
Some agents make it out like “AS IS” means the buyer must accept it like it is or move on.
After an inspection, certain areas of concern may arise which affect the buyer’s willingness to pay the initial agreed upon amount.
When the AS-IS contract was submitted, the buyer was likely unaware of these items. Offering a different price, asking you to repair the items, or suggesting to credit an amount at closing are all possible negotiations you might see. The goal is to find a resolution, not cancel the contract and move on.
Unless, of course, the situation demands it.
This gives you a generalized overview of what I typically see, not a concrete source of specific advice. There is no cookie-cutter contract I can say will work best for this and not for that. Working directly with the best real estate agent in the area will ensure you’re accepting the most beneficial contract and terms.
Be leery of part-timer/weekend realtors who aren’t privy to current contract knowledge. In this ever-changing market, stick with full-time professionals you can trust.
Not sure who that is? Feel free to reach out to us. We’ll get you connected to the best real estate office in your area.