Most home buyers need to obtain financing in order to buy their home. When making an offer to purchase a home, the Florida Association of Realtors (FAR) Sale and Purchase Contract has a clause that covers this contingency for the buyer and sellers protection.
This clause allows the buyer to select that they will be applying for new financing. The choices of financing offered are; conventional, FHA and VA financing. The percent of the purchase price that the buyer will be financing is also listed on the contract.
When entering into a contract with the seller, the buyer is usually agreeing to apply for financing shortly after receiving an accepted offer. This application process should be done as soon as possible following the acceptance of their offer. The FAR contract allows for 5 days should the buyer not select a different time period.
Unless changed by the buyer or seller, the FAR contract then allows the buyer 30 days after the effective date or 5 days prior to closing, whichever occurs first, to obtain a written financial commitment or approval letter. If the buyer is unable to obtain written commitment, then the buyer should let the seller know in writing during this same period.
The buyer’s financing contingency requires the buyer to keep the parties involved in the transaction, real estate brokers and sellers, updated about the application process and any issues that may arise as they work towards receiving their financial commitment. If the buyer has used diligence and is unable to receive a commitment letter in the allowable time period, then the buyer can notify the seller in writing and the contract may be cancelled with the buyer receiving any deposits back that they have made once both parties have agreed to cancel the contract.
Purchase contracts are legally binding documents and should never be entered into lightly. The financing contingency portion of the contract is one of many legally binding contingencies. We have the experience and knowledge to successfully write offers for you as a buyer but would always encourage you to seek legal advice from and attorney if you are not totally comfortable.
Related Florida real estate views:
Get a survey when buying a home or property
Seller disclosure: Termites & Wood rot
Realtor and seller obligations under a listing agreement.
- Greg Staker - Watson Realty Corp. - 407-304-0255
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