The Florida Association of Realtors in conjunction with the Florida Bar (FR/BAR) has simplified loan approval period obligations in the newest versions of its Residential Sales Contract and accompanying riders.
The big picture:
FR/BAR’s adjustment to Section 8 streamlines the process for individual real estate transactions in the state of Florida and the state’s real estate market as a whole.
- Sellers are better protected with this change – financing for the buyer is secured earlier in the sale process, and if approval is not met within the Loan Approval Period, the sale process can start over faster than if the transaction fell through at the closing table.
- Buyers are encouraged to finish the approval process quickly, in order to focus on other aspects of closing, such as securing title, insurance, and resolving material deficiencies to the property.
Why it matters:
If a buyer requires a loan in order to purchase a property, they will now need to ensure that their financing is fully approved prior to the expiration of the contract’s Loan Approval Period.
- This change shortens the timeline for a Buyer to secure required appraisals and other information for the lender.
- Under the previous language, a transaction could move forward without fully secured funding, running the risk of a missed requirement resulting in loan approval being rescinded by the lender as late as the day of closing.
ALL THE REST:
FR/BAR made minor adjustments to other sections of the Residential Sales Contract to clarify and update ambiguous and outdated language.
- Sufficient notice provisions were revised to delineate email as the only acceptable form of electronic notice.
- The force majeure provision now includes government shutdowns, pandemics, and civil unrest.