Red Flags I See in Florida Real Estate Purchase Contracts
A real estate purchase contract is much more than an agreement on the price of a property. It establishes the parties’ deadlines, obligations, contingencies, remedies, and rights if something goes wrong.
Unfortunately, many buyers and sellers focus almost entirely on the purchase price and closing date. By the time they realize another provision creates a problem, the contract has already been signed and is legally binding.
Not every unusual provision is necessarily a dealbreaker. However, the following are some of the most common red flags I look for when reviewing Florida real estate purchase contracts.
1. Important Deadlines Are Blank or Unclear
Real estate contracts are driven by deadlines.
The contract may establish specific time periods for:
Delivering the escrow deposit
Completing inspections
Applying for financing
Obtaining loan approval
Reviewing association documents
Raising title objections
Completing the final walkthrough
Closing the transaction
Leaving a deadline blank does not always mean that no deadline applies. Depending on the contract form, a default time period may automatically control.
This can create problems when a buyer or seller assumes they have more time than the contract actually allows. Florida Realtors has also updated certain contract forms and time-calculation provisions in recent years, making it especially important to confirm how each period is calculated.
Every deadline should be identified before the contract is signed and immediately added to the parties’ calendars.
2. The Financing Contingency Does Not Match the Buyer’s Actual Loan
A financing contingency should accurately reflect how the buyer intends to purchase the property.
Red flags may include:
The contract describes the purchase as cash when the buyer needs financing
The loan amount or financing type is incorrect
The financing period is too short
The buyer’s obligation to obtain approval is unclear
There is no appraisal protection
The buyer must proceed even if the property appraises below the purchase price
A preapproval letter does not guarantee that the lender will ultimately approve the loan. The lender may still need to verify the buyer’s finances, approve the property, review the appraisal, and satisfy underwriting requirements.
A buyer who waives financing or appraisal protections may still be contractually obligated to close even if the lender denies the loan or the property appraises for less than expected. The financing terms, appraisal language, and related deadlines should therefore match the buyer’s actual circumstances. Florida Realtors likewise identifies the financed amount and financing, appraisal, and inspection contingencies as critical terms that must be addressed precisely.
3. The Buyer Does Not Understand What “As Is” Means
An “as is” contract does not necessarily mean the buyer must accept the property regardless of its condition.
Under the commonly used Florida Realtors/Florida Bar “AS IS” residential contract, the buyer generally has a strong cancellation right during the inspection period, subject to the specific terms and deadlines stated in the contract.
The problem arises when buyers misunderstand how that right works.
Common concerns include:
The inspection period is too short
The buyer does not conduct inspections promptly
The buyer assumes the seller must make repairs
The buyer misses the deadline to cancel
The contract includes additional language limiting the buyer’s inspection rights
Under an “as is” contract, the seller is generally not agreeing in advance to make repairs. The buyer may still request repairs or a credit, but the seller may refuse. The buyer must then decide whether to proceed or exercise any available cancellation right before the inspection period expires.
4. The Contract Does Not Adequately Address Title or Survey Issues
A buyer is not just purchasing the physical home. The buyer is purchasing legal ownership of the property.
Title and survey issues can include:
Existing mortgages or liens
Judgments against the seller
Open permits
Code violations
Easements
Encroachments
Boundary disputes
Unreleased prior interests
Restrictions affecting how the property may be used
The contract should clearly explain who will conduct the title search, who will pay for the owner’s title insurance policy, how title objections must be raised, and how much time the seller has to resolve any defects.
A survey is also important because a title search alone may not reveal physical matters such as a fence, driveway, pool, or structure extending across a boundary line. The Florida Bar recommends that purchasers consider both title insurance and a professional survey before buying property.
5. Verbal Promises Are Not Included in the Contract
A major red flag is when the parties have reached an understanding that does not appear anywhere in the written agreement.
For example, the seller may have verbally agreed to:
Repair the roof
Leave certain furniture or appliances
Provide a credit at closing
Resolve an open permit
Remove personal property
Complete work before closing
Allow the buyer early access to the property
If an agreement matters to the transaction, it should be included in the contract or a properly executed addendum.
The language should also be specific. A provision stating that the seller will “address the roof” is far less useful than language explaining exactly what work must be completed, by whom, when it must be completed, and what documentation must be provided.
Written contracts need sufficient specificity to clearly establish the parties’ agreement and be enforceable.
6. Association Documents and Assessments Are Not Properly Addressed
When purchasing property governed by a condominium or homeowners’ association, the buyer is also agreeing to comply with the association’s governing documents and financial obligations.
Before moving forward, buyers should understand:
The amount of regular assessments
Whether special assessments have been approved or discussed
The association’s reserves and financial condition
Rental and occupancy restrictions
Pet restrictions
Vehicle and parking rules
Approval requirements
Pending litigation
Planned repairs or major projects
Florida law provides specific disclosure and document-delivery requirements for certain condominium and homeowners’ association transactions. For example, condominium purchasers may be entitled to receive governing documents, financial information, and certain inspection-related materials, while buyers in mandatory homeowners’ associations must receive a statutory disclosure summary.
The contract should also clearly state whether the buyer or seller will be responsible for pending, approved, or future special assessments. A vague provision can create an expensive dispute shortly before or after closing.
7. The Default and Deposit Provisions Are One-Sided or Misunderstood
Many buyers assume that if they decide not to purchase the property, they can simply walk away and recover their deposit.
That is not always true.
The contract’s default provisions determine what may happen if either party fails to perform. Depending on the agreement, a seller may be permitted to retain the buyer’s deposit as liquidated damages or pursue other remedies. Certain Florida contract forms may provide the seller with different remedy options depending on the language selected.
Before signing, the parties should understand:
When the deposit becomes nonrefundable
What happens if the buyer misses a deadline
What constitutes a default
Whether the seller may retain the deposit
Whether either party may seek specific performance
Whether attorney’s fees may be recovered
How escrow disputes will be handled
The deposit and default sections should never be treated as boilerplate. They can determine the parties’ financial exposure if the transaction falls apart.
Read the Entire Contract Before Signing
A standard form contract is still a legally binding contract.
The fact that a provision appears in a commonly used form does not mean it is automatically favorable to both parties or appropriate for every transaction. The contract should reflect the specific property, financing structure, deadlines, negotiations, and expectations involved in the deal.
A careful contract review at the beginning of the transaction can identify unclear terms, preserve important protections, and prevent costly disputes later. Once the contract is signed, changing an unfavorable provision usually requires the other party’s agreement.
When it comes to buying or selling real estate, understanding the contract before signing is one of the most important steps you can take to protect yourself.
If you are considering entering into a contract, I can help you review it. Contact me today for more information.
