Real World Training!
You REALLY need to know more about the most widely used contract in Florida! The Far Bar Contract is the way you get paid when you put together a real estate closing. Make a simple mistake drafting the Far Bar Contract, and you could cost yourself tens of thousands of dollars. I have seen agents lose a lot of money! Why is this? Lack of training and knowledge on contract law and how to work with this form (or any contract form). You don't have any idea what you don't know and it can hurt your wallet.
Want to get to know the most widely used As Is Residential Contract for Sale and Purchase in Florida? There is a ton of useful info and video training on this page, so get reading and watching.
If you don’t know much about me, click here or head to the bottom of this post and see why you should allow me to share my expertise with you.
Let’s get right into the nitty gritty of some information about the Far Bar Contract form and the addendums!
The Most Widely Used
Florida Real Estate Contract
The 2017 Far Bar Contract Form has not been updated in almost four years now. Why is this? The 2017 version was in my opinion one of the best versions they have ever put out for use by Florida Real Estate Agents. Yes, some of you may say (and I agree) that there are still issues with it, so we will get into analyzing some of the challenges with this form in other articles and videos. Overall this contract is one of the best around, so it is no wonder that it is the most widely used as is residential contract for sale and purchase in Florida.
As Is Contract Florida
There is no real-world training out there for you on the Far Bar Contract. So I decided to do this blog and educate you! I have been teaching contract drafting and the law for 22 years now. Over 100,000 views of my training videos and counting.
Seriously, multiple thirty plus year veteran brokers, who own large offices, have left my live far bar events and realized they had been putting their offers and contracts together with some fatal flaws! You don't want flaws in your contracts, do you? Of course not! Get educated and learn from other people's mistakes. Any "fatal" flaw can allow an attorney to step in and cancel your contract.
Let's get started!
The truth is that only real estate attorneys have this kind of specialized knowledge, but most do not have the time to teach this stuff since they are swamped running their practice and doing closings. Why did I have the time and do now? I turned my law practice over to my wife years ago, and she ran the day to day operations, which gave me the time to teach and share my knowledge on contract law, and all kinds of info. Now, all I do is online courses for a wide variety of people. I have online courses on how to open and run a successful small business, to how to attract ideal customers, as well as all kinds of training for attorneys. I am even a partner in a consulting and online coaching company that assists lawyers in leaving the law when they are not happy.
I know how to do online training and I REALLY know the farbar contract. Let me help you get to really understand how to use this contract, and many of the pitfalls that trip cause so many of the issues for real estate agents in Florida.
So, where do we begin here? With a story, of course! Check out the video below where I share with you a story of how an agent lost $30k in commissions due to a couple of simple errors that occurred when she drafted the offer. Sadly these errors were easily avoidable.
The Info You Use is Key!
How correct is the information you use to draft the offers you put together for your buyers on the Florida real estate contract form? If you are the Listing Agent do you double-check the information the buyer's agent used on the FarBar Contracts? Having correct "data" can be quite significant.
It could be the difference between you getting paid or the contract being killed/canceled.
Let me outline the data points you should start paying attention to when you draft offers, or an offer hits your inbox on a listing.
1- Seller and Buyer Names:
Ask the buyer(s) how they spell their legal names, and even check their license to make sure you are correct when you add their info to page 1 of the Far Bar Contract. Why is this important? Lots of companies work from the contract form, including lenders, title companies, surveyors, and the other brokerages. If you misspell the name, it could cause you issues at closing, and massive delays in getting to the closing. I have been sitting at closings where the agents screwed up the buyers' name, and it caused us a 2 to 3-hour delay on many occasions! The lender had to redo all the docs, the survey had to be redone, and the title had to be corrected. No one caught it until I sat with the driver's license and noticed the error. As I said, this happens more than you know. When it occurs, you are the one who looks sloppy.
Making sure the Seller(s) names are correctly spelled. When I have drafted offers over the years, I would always head the public records and pull the deed where the seller took title. You probably head right to the property appraiser website and copy and paste the names and legal description onto your far bar offer. Well, I am here to tell you that the appraiser data can be wrong. Go the extra step and get the deed from public records (you can sometimes find the link to the deed right from the property appraiser record online.) In my Far Bar online training course, I walk you through this step by step, so you do not screw it up.
Check and double-check your data and information sources!
2- Legal Description:
Let me share another story on how using the incorrect legal description not only cost an agent his entire commission but lost him the buyers and almost got him, and his broker sued:
3- Personal Property Pitfalls
Personal property can be a minefield and cost you hundreds or even thousands of dollars. I have been performing closings where the agents end up paying for an appliance (or two), a new light fixture in the dining room, and all kinds of personal property. Mistakes can cost you money and time when you do not pay attention to the DETAILS! Want to know how to make sure you do not make fatal mistakes in this section of the Far Bar Contract up? Sign up for my training, and I will train you! Protect your buyers and sellers. Do not get stuck writing a check for something when some simple tips could save the day. Sign up for the videos on the homepage. Find out more HERE.
As you heard in the story I told above, not outlining contingencies in the offers and contract form can be a massive issue for real estate agents. Please make sure you include any contingency information in the special clauses section, and if you don't know or understand what you are doing, be sure to include your broker or an attorney in drafting these sections. It can be such an embarrassment for you personally and professionally when this is forgotten or done incorrectly. Don't get sued or a complaint filed with FREC!
Let's talk briefly about what a contingency is. See the definition of the word Contingency. The key in the definition is the word "CONDITION". If for instance there is a contingency clause that requires the buyer(s) house to sell and close in order for your contract to move to closing, then if the condition of the buyers' house selling and closing does not occur then, the buyer or seller can cancel the contract. This really depends on the wording of the clause. There are also contingency clauses based on the house in a cash deal appraising for at least the purchase price, and many others. Be aware!
I would leave the language for these clauses in a contract to the attorneys involved. You do not want to be charged with practicing law without a license (which I will talk about briefly below in this article.)
Florida Farbar Contract Explained
More stuff that can trip you up
RED FLAGS and DEAL KILLERS- I did a live training for my members of the Far Bar Training portal, and I want to invite you to download the pdf handout with the list of all the stuff I teach in this hour-long training. When you sign up for this downloadable pdf, I will also send you a mini class of 4 videos for free. Get the worksheet now and get learning!
So many issues to teach you about here! Downloaded the worksheet I mentioned above. There is so much you really don't know that you can educate yourself on. I outline TWENTY-TWO possible issues in this worksheet handout and go through each on in a live training included in my kick-ass training. Get the Far Bar Training by clicking the button below. How well do you really know this business?
Practicing Law Without a License?
Did you know that you can be charged with a crime for practicing law without a license when you go too far in drafting your offer, and try to do too much? This does not happen often, but it does happen. Read more about it here. It is a felony!! The more significant issue is when you try to play a lawyer in the additional clauses section, and you do not know what you are doing, you subject yourself to a lawsuit from any of the parties and/or having a complaint filed against your license.
Ask your broker before adding some special language that the buyer and or seller wants in the contract. If it gets technical, then an attorney should be brought in to draft the section. I have seen more of these mistakes cause so many agents trouble over the years, and I don't want you to be one of them. Be careful!
More about this in a video:
Watch the video below and be on the lookout for the new article/post I am working on here!
Offers and Counteroffers
So you made your offer by sending the filled out form over the listing agent. Let's discuss some of the pitfalls that can occur here.
I don't know how many agents have called me and said “Isn’t the Sellers Disclosure required on every transaction?” The easy answer is no it is not required and there is no law that makes it a requirement, UNLESS...
Let me share with you more info in this video:
5 Mistakes Agents Make and Lose Thousands
Since there is so much you need to know, I created a training video on the five top mistakes (there are a lot of others!). Let’s do a quick overview of these challenges and if you want to learn more about each check out the replay of the live training by clicking---> GET THE LIVE TRAINING REPLAY
1- Legal Description
This is a huge problem that can affect you and your customers so read on! You screw up the legal and the contract can be easily cancelled by any good attorney. Sign up for the free training where I outline a simple checklist to use every time you draft a contract so you never screw this up!
What is this? It stands for Meeting Of the Minds
If you have no meeting of the minds in your contract, your contract is really NOT a contract. It is just a pdf or a few pieces of papert with some black ink on it. I have seen so many contracts invalidated due to the negligence on the real estate agent’s part. Do not make it easy on attorneys to tell your buyer or seller you screwed up and there is NO contract, and all the time and money everyone has invested in the deal is now a huge waste. GET MORE DEPTH HERE- LIVE TRAINING REPLAY
3- Effective Date
This can be the most tricky part of the whole process once the contract is fully executed. How do you know when the effective date of the contract truly is? How can you protect yourself and your customer so everyone is on the same page the one date that really guides the entire process to closing?
I have seen many mistakes here, and one of the issues with screwing up the effective date is the calculating inspection periods, mortgage deadlines, and the myriad of dates that create deadlines for the buyers and sellers.
Get my FREE training replay to learn more about how you can ensure everyone is in agreement on the actual effective date!
4- Calendaring Important Dates
If you have the correct and agreed upon effective date it is still easy to make a mistake on the list of important dates that come up on each and every contract. Make sure you use an easily replicable system to calendar the important dates for every contract your customers enter. As you know I cover this in the replay, so watch it now.
5- Escrow Deposit Screw Ups
As I sat thru many of the continuing education classes for my Real Estate Instructors License for Florida, I would hear and read about the horror stories of unwitting agents who screw up when it comes to Buyers’ Escrow deposits. Mistakes here are easier than you realize. Yes, there is more info on the webinar video, but I will also be writing more articles and prepping videos on just this topic, so sign up for my free training now so you don’t miss any of my content.
How to Be A Successful Real Estate Agent
I have been licensed as a real estate agent in Florida for thirty years and grew up in the business. My mother got licensed in the late 1970s. I grew up in the real estate business and have worked in it in a multitude of ways. From answering the phones in her Century 21 office to building and installing all of her signs for her listings while I was in high school, to getting licensed at 19 years of age I have done it all. My mom was a top producing agent and award-winning broker, so I have seen what it takes to do well as a real estate agent.
I sold real estate during the summer breaks in college, and at 19 years of age, I was taking listings and selling homes to multiple buyers. I remember the first offer I made on a listing for my buyers; I had no idea what PITI was even though I was able to figure out the principal and interest payment. There is so much most agents (even seasoned ones) have no clue about, and the most significant area of unknowns is the real estate contract forms. We learn very little about contract law in real estate school and forget most of it within a few days of passing the test.
Most agents do not know much about the contract form they use or deal with daily. Sadly, agents know more about the MLS system and lockboxes than they do about the document that gets them paid for putting buyers and sellers together!
If you want to be super successful as a real estate agent, then you need to know the business inside and out. Your reputation depends on how well you know ALL aspects of the business. Not just having the ability to sell, the knowledge of the local inventory, or pricing of your listings. You need this information and new skills to truly be successful.
Success does not mean just making large sums of money. It is much bigger than this! Success in my book means that you truly care about your customers. Taking care of your customers means that you have as much knowledge as you can in all areas of the business. You may think you know enough to get you by. Sorry to break it to you, but this isn't the case.
Do not wait to learn what I have to teach you until you get sued, a complaint filed against you, or you lose a bunch of money in commissions.
Stick with me and let me make you into a contract specialist!
The As Is Contract Challenge
Back when I was first licensed (30 years ago) there was no such thing as an As Is Contract. The Buyers had the right to do inspections and the Sellers fixed the issues or the contract cancelled. As the market began to change over the years, what had been a Sellers’ Market quickly became a Buyers’ Market. In the early 2000’s when the real estate boom hit the market flip flopped and Sellers had multiple offers on the home they had just listed. This cemented the As Is Contract as what was customarily used, since Sellers not only got top dollar sales prices and they could tell the buyer- “take it or leave it” as far as any repairs. So 15 years later the As Is Contract is here to stay for the foreseeable future.
I always liked the As Is form, since no one was really locked in to a certain percentage for repairs. It forced some meaningful conversations about what repairs the seller would pay for and why. The challenge for you as an agent with the Far Bar is that it is very easy for either party to cancel the contract for many reasons. This is why you should make sure you put together the best contract you can, so once the inspection period is over there isn’t much ability to cancel the deal due to errors on your part. Clearly if there is a mortgage contingency then this is the next big hurdle to overcome, but is one of the parties gets cold feet they will have to pay their way out of the deal (that is if you did your job and created a hard and fast meeting of the minds).
Get My Contract Drafting Checklist
“How To Get Out of a Realtor Contract”
Buyers and sellers can be very fickle. They are looking for an excuse to give you a "haircut" as my long time commercial real estate broker friend likes to say. What does a haircut mean? If they get cold feet it means they will try too back out of the deal. If they are paying a high amount of commission then they will try to cut your total amount of commission.
There are all kinds of articles on the web on “How to Break Up With Your Real Estate Agent” (Zillow), How to Terminate a Contract With a Real Estate Broker, or “How to Get Out of a Real Estate Contract” (WikiHow). So it pays to really know your business, and it can pay to know the Far Bar Real Estate Contract. Sadly, there are few trainers who really know the contract and the addenda in and out. Did you know every month there are thousands of searches on how to get out of real estate contracts and people searching how to get out of listing agreements?
You really need to get to know the Far Bar Contract and the Addenda!
This is where I can help.
Begin with my live training replay on the Five Mistakes Agents Make. It is really easy to screw up a contract, and get it cancelled by an attorney who knows what they are doing. Not only have I seen countless contracts cancelled due to the errors by unknowing real estate agents, but you make a simple mistake like these, you will lose your customers. Sign up for my free training and also get access to new webinars, and all my new videos (and articles). This info could save you tens of thousands of dollars in lost commissions!
Head to the homepage for a killer 4 videos series I created just for you-- HOMEPAGE
Let me tell you a little about myself! My name is Adam, and I am not only a real estate attorney for the past twenty two years, but I am also:
- Licensed Real Estate Broker for 18 years
- Licensed as an Agent since 1991
- Licensed Real Estate Instructor in Florida since 2004
- South Broward Board of Realtors Standard Forms Committee Attorney for many years
- I have drafted residential and commercial contracts from scratch!
- Published Author- Raising the Bar (A book for my fellow lawyers)
Further, I have closed billions of dollars worth of real estate transactions as an attorney and thru my title companies over the years. I have been involved as an attorney in my fair share of litigation on real estate contracts as well. All of this expertise gives me the horsepower to teach you not only about contract law but a variety of other topics which I will write about and do videos on in the future.
The difference between me and other trainers is that I actually did your job! I listed and sold my fair share of houses over the years, so I know how hard it is to get a buyer or seller to contract. I know this business like few others in the world!
Further Reading- Articles by other Florida lawyers: