By Jessica Andrade

If you are like the majority of homebuyers in Florida, you are probably all too familiar with the Residential Contract for Sale and Purchase as approved by the Florida Realtors and The Florida Bar (the “Purchase Agreement”).  By “familiar,” I mean you’ve probably seen it – either your realtor has shared it with you or you stumbled across it online.  But do you really understand its terms?  Before signing on the bottom line, consider these ten quick tips that could save you a lot of time and trouble throughout the buying process.

  1. Personal Property – Page 1, Sections 1(d) and 1(e)

Do you believe that you are purchasing the home with a refrigerator? With a washer and dryer?  Make sure that the items that you believe are remaining in the house are listed in the Purchase Agreement.  The last thing you want on the date of closing is to discover that every appliance is missing from the house.  Clearly articulate what items are included/excluded with the purchase of the house in the Purchase Agreement, paying closing attention to the items already listed in 1(d).

  1. Assignability – Page 2, Section 7

Do you plan on purchasing the house individually? As husband and wife? Planning to add a son, daughter, or sibling as a purchaser at the last minute? If there is any chance that someone other than the party listed as the “Buyer” at the top of page one will be purchasing the house, make sure your Purchase Agreement is assignable.

  1. Financing Contingency – Page 2, Section 8

Do you plan on obtaining a loan to purchase the house? By completing the blanks in Section 8(b), you provide yourself the ability to terminate the contract in the event you cannot obtain a loan pursuant to the terms you outline in Section 8(b) – even if you are outside of the inspection period provided for elsewhere in the Purchase Agreement.

  1. Repair Limits – Page 3, Section 9(a)

As a buyer, you will likely obtain a home inspection at some point during the inspection period prior to closing.  If you have a lender who is loaning you money to purchase your home, they will require an inspection and may require certain repairs prior to loaning you the money.  You will likely want to negotiate with the seller to have the seller make these necessary repairs.  In Section 9(b), you can negotiate these repair limits (either by dollar amount or percentage of purchase price) with the seller in order to require the seller to make these repairs for you so you, as the buyer, don’t have to.

  1. Closing Agent – Page 3, Section 9(c)

In the state of Florida, it is customary for the seller to pay for the Florida documentary stamp taxes due on the deed and for the buyer to pay for the owner’s title insurance policy.  However, the seller may pay for the owner’s title insurance policy and designate the closing agent.  If you have someone in mind that you would prefer to close with, you might consider discussing Section 9(c)(i) and 9(c)(ii) with the seller to ensure that you have both checked the appropriate box.

  1. Home Warranty – Page 3, Section 9(e)

A home warranty plan provides for repair or replacement of many of a home’s mechanical systems and major built-in appliances in the event of breakdown due to normal wear and tear during the home warranty agreement’s warranty period.  Many times, Sellers will offer to purchase a home warranty plan as an incentive for the Buyer to purchase their home.  As a buyer, consider discussing this opportunity with the Seller prior to executing the Purchase Agreement.

  1. Condominium or Homeowners Association Rider – Section 19: Rider A and Rider B

Is the home you are looking to purchase located within a condominium association or homeowners’ association? If so, make sure to have the seller complete and attach Rider A and/or Rider B, as applicable, to ensure that you are provided as much information on the associations prior to execution of the Purchase Agreement.  Associations, more often than not, require monthly dues which are an important item to keep in mind when preparing your monthly home payment budget.

  1. Appraisal Contingency – Section 19: Rider F

Are you concerned about the value of the house?  Is the purchase price higher than what you anticipated paying?  By adding Rider F, you can build in the opportunity to obtain an appraisal and terminate the Purchase Agreement if the appraisal does not state the value you’ve designed in this Rider – even if you are outside of the inspection period provided for elsewhere in the Purchase Agreement.

  1. Homeowners/Flood Insurance Rider – Section 19: Rider H

Budgeting for your new home can be difficult, especially when you may not discover certain necessary costs until just before closing.  If you are planning to purchase a home near the water and are looking to keep within a certain budget for your monthly home payment, consider Rider H which allows you to place a limit on the premium you are willing to pay for Homeowners’ Insurance and Flood Insurance.  If you are unable to locate an insurance carrier who will write insurance based on your maximum annual premium, you will be able to terminate the Purchase Agreement.

  1. Lead Based Paint Disclosure – Section 19: Rider P

Are you planning on purchasing an older home?  Be sure to ask the seller if the home is pre-1978. If the home is pre-1978, the seller should complete Rider P in order to disclose any known lead-based paint problems they have incurred during their ownership.

It’s important to remember that once both buyer and seller sign on Page 12 of the Purchase Agreement, the Purchase Agreement is valid and binding and the parties are obligated to close, save for certain contingencies provided in the Purchase Agreement.  While this checklist is certainly not exhaustive, it will provide a good primer for the buyer’s consideration and protection prior to signing on the bottom line.