Eugene Vigoa, Esq.

Can a buyer assign the contract to someone else?
The short answer is yes, unless the contract does not allow for it.
In the Florida "As Is" contract, page 2, paragraph 7, there are three options that can be checked off concerning assignability.  Obviously, as a seller, you might not want the buyer to assign the contract to someone else you do not know. 
The contract allows for three options.  The first option allows the buyer to assign and be released from liability; the second option allows the buyer to assign and not be released from liability, and in the third option, the buyer may not assign the contract at all.  
The seller obviously needs to read the contract carefully to make sure that they agree with all its terms.  If the contract is assigned, the seller may end up having to deal with a different buyer that they did not bargain for.

Training Class with Rad Properties at First Choice Title Services & Escrow, Inc.  Monday, November 7, 2016 at 10:00 a.m.  Any other realtor interested in attending, call Maria Liriano at (954) 433-7680 or email maria@firstchoicetitleservices.com.

What are the key provisions of the purchase contract?

There are many important key provisions in the purchase contract. However, some of the most important are obviously the sales price. The buyer and the seller has to agree on a sales price, otherwise you don't really have a contract. Then the closing date, that's important because you have to close by that date. If you don't, there are going to be legal consequences either to the buyer or the seller. After that, you have contingencies. Contingencies are anything that has to happen, and if they don't, either the buyer or the seller can cancel the contract. Some of the contingencies could be a mortgage contingency, an appraisal contingency and an inspection contingency.

Eugene Vigoa, Esq.

CLOSING DISCLOSURE

The seller must be provided with a seller side closing disclosure or settlement statement prior to closing.  When you receive it, make sure that the information is accurate.  For example, double check the commission, if any, and other charges that the seller is paying.  In Broward and Miami-Dade counties, it is customary for the seller to pay for their title search, municipal lien search, estoppel letter, and a settlement fee for preparation of the deed and other seller closing documents, unless the contract says the buyer will pay for it.  

Also, the seller will pay for prorated property taxes and special assessments if any.  Finally, the seller also pays for a documentary tax, or doc stamp.  There may be additional fees the seller will pay depending on the situation.  If you are not sure about a particular fee or charge, don't hesitate to ask the settlement agent to explain it to you.

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Eugene Vigoa, Esq.

TITLE INSURANCE AND THE SELLER

If you are selling your home, the buyer will most likely want to purchase title insurance to protect them against possible title defects.   As a seller, you probably purchased title insurance yourself when you bought the property.  The buyer's settlement agent may contact you regarding issues that appear on title that need to be corrected prior to closing.  

The most common being an open mortgage recorded against the property.  However, there are many issues that can arise on title that is the responsibility of the seller to correct prior to closing.  The reason is that the sales contract requires the seller to provide the buyer with marketable title.  That is, clear title so that the title insurance company can issue a title policy to the buyer.

An experienced settlement agent will work with the seller to clear issues that come up during the title search; however, there may be instances where the seller may have to get an attorney to help them clear title issues.

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Eugene Vigoa, Esq.

CLOSING DATE

Sellers usually want to close as soon as possible, and buyers want as much time as they need.  A good compromise is to close within 30-45 days depending if the buyer will finance the purchase or not.  If the sale is as cash transaction, then 30 days should be sufficient time to close.  If the buyer needs more time, the seller can always agree to an extension.  If the buyer is going to finance the purchase, then 45 days is a reasonable compromise; however some lenders may take longer to finalize the loan.

It is difficult to guess at the time the contract is signed how long will it take to close the transaction, for that reason, both parties should remain flexible.

Eugene Vigoa, Esq.

CLOSING DATE

Sellers usually want to close as soon as possible, and buyers want as much time as they need.  A good compromise is to close within 30-45 days depending if the buyer will finance the purchase or not.  If the sale is as cash transaction, then 30 days should be sufficient time to close.  If the buyer needs more time, the seller can always agree to an extension.  If the buyer is going to finance the purchase, then 45 days is a reasonable compromise; however some lenders may take longer to finalize the loan.

It is difficult to guess at the time the contract is signed how long will it take to close the transaction, for that reason, both parties should remain flexible.

Eugene Vigoa, Esq.

INSPECTION CONTINGENCY

In the Florida "As Is" contract, the seller and the buyer can agree on how long the buyer will have to inspect the property, and more importantly, cancel the contract and have their deposit returned to them.  If left blank, the current version of the contract, has a default of 15 days from the effective date of the contract.

Obviously if you are a seller, you may want to negotiate the number of days to inspect to less than the default 15 days.  Remember, during that period of time, the buyer can cancel in their sole discretion, and now the seller has to start looking for another buyer.

Eugene Vigoa, Esq.

CASH TRANSACTIONS

Sellers like cash transactions because that means that the buyer does not have to apply for a loan and the closing can take place sooner.  However, if the seller has an offer from a "Cash" buyer, ask to see proof of funds.  Ask for a bank statement showing sufficient funds to close, and make sure the statement is a recent one. 

Eugene Vigoa, Esq.

MORE ON DEPOSITS
As a seller you want the buyer to put up as large a deposit as possible for obvious reasons. A significant deposit shows the buyer are serious about completing the purchase. If the buyer only has a small deposit to risk, they may be willing not to close and lose their deposit. If however, they stand to lose a large deposit, then they will think twice before walking away from the deal.
Buyers often get "buyer's remorse" and don't want to close for reasons that have nothing to do with the property. A large deposit makes the buyer, if anything, think twice about wasting the seller's time.

Eugene Vigoa, Esq.

TIP OF THE WEEK
Ask for an "Escrow" letter from the settlement agent to make sure the buyer gave the security deposit if the contract calls for one.