Repairs
The traditional FAR/Bar contract obligates the seller to repair or provide a credit to the buyer for repairs up to a certain amount. The default amount is 1.5 percent of the purchase price. These repairs, including any mold found, items needing structural repair and wood rot from termites and other wood-destroying organisms. The seller is required to make the necessary repairs up to the contracted amount and the buyer is obligated to move forward with the contract. In comparison, the as-is contract specifically states that the seller will not be responsible for any repairs. However, the buyer can still have an inspection completed on the property to determine any problems with it.
Permits
Under the traditional Far/Bar contract, the buyer agrees to close open permits and acquire permits for any unpermitted improvements up to the limit provided in the contract. In the as-is contract, the seller must cooperate with this process but does not have to expend any funds for this purpose.
Inspection Period
The Far/Bar contract provides for a longer inspection period than the as-is contract. The Far/Bar contract allows for an inspection of 15 days after the contract’s effective date of five days before closing to complete inspections, whichever is earlier. The inspection period for an as-is contract is fifteen days after the effective date of the contract or the period designated by the seller if written in.
Right to Cancel
One of the primary differences between the two contracts is how cancellation is handled. The Far/Bar contract gives the buyer the absolute right to cancel the purchase agreement for any reason until the expiration period. With the as-is contract, the buyer can still cancel, but only within a certain number of days from when the home inspection is completed and before the inspection period expires.
If you are interested in buying or selling property, call Isabelle Andrews at 305.546.5421, Alba Biondi at 305.323.2595, or email us at theteam(at)groveexperts(dotted)com.
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