The FAR-BAR Contract in Florida: A Section-by-Section Walkthrough

The Florida Realtors/Florida Bar Residential Contract for Sale and Purchase — universally known as the FAR-BAR contract — is used in the vast majority of Florida residential transactions. If you are buying or selling a home in Tampa Bay, St. Petersburg, or anywhere in Central Florida, this is almost certainly the document you will sign.

There are two versions: the AS-IS contract and the Standard (non-AS-IS) contract. The AS-IS version is by far the more common of the two. It does not mean the buyer accepts whatever condition the home is in — it means the seller is not agreeing to make repairs after the inspection period. The buyer retains the right to walk away during the inspection period if they do not like what they find.

One important note before we go further: I am a real estate agent licensed in Florida, not an attorney. Nothing in this post is legal advice. Contract interpretation, rider disputes, deposit disputes, or default situations all warrant a conversation with a Florida real estate attorney. What I can give you is a working understanding of how the form is used in practice — so you are not reading it for the first time at the closing table.

Section 1: Purchase Price and Deposit Structure

Section 1 of the FAR-BAR AS-IS contract establishes the purchase price and breaks down how it is funded. The purchase price is divided into: (a) the initial deposit, (b) any additional deposit, (c) financing proceeds, and (d) the balance due at closing.

The initial deposit is typically due within 3 business days of the effective date (the date the contract is fully executed by both parties). The effective date is not the date you signed — it is the date the last party signed. This distinction matters when you are counting days for contingency deadlines.

In practice, initial deposits in Central Florida and Tampa Bay run from 1% to 3% of the purchase price. On a $450,000 home, that is $4,500 to $13,500 held in escrow by the title company or the listing brokerage. A second (additional) deposit is sometimes due at a later milestone — for example, 10 days after the effective date or at the end of the inspection period.

• The initial deposit is held in escrow — it does not go to the seller until closing
• The escrow holder (title company or broker) is a neutral party. Neither buyer nor seller can demand the deposit be released without the other party's consent or a court order — or as provided in the contract's dispute resolution provisions
• Higher deposits signal buyer seriousness in competitive offers. Cash buyers sometimes put 5–10% down immediately
• Deposits are credited toward the purchase price at closing — they are not a fee in addition to the price

Section 5: Financing Contingency and Loan Approval Timeline

Section 5 (Financing) is one of the most consequential sections for buyers using a mortgage. It establishes the loan approval period — the deadline by which the buyer must obtain written loan approval, terminate the contract, or request an extension in writing.

The typical loan approval period in Florida contracts runs 30 days from the effective date for a conventional loan, though this is negotiable. FHA and VA transactions often use 45 days given the additional processing requirements.

What the financing contingency covers is specific: the buyer must be approved for the loan at the terms stated in the contract (loan type, maximum interest rate, loan amount, loan-to-value ratio). If the buyer cannot obtain approval on those terms by the deadline, they have the right to cancel and recover their deposits.

What it does not automatically cover: appraisal gaps. If the home appraises below the contract price, the lender will only finance the appraised value — leaving the buyer to either make up the difference in cash, renegotiate with the seller, or cancel. The financing contingency does provide some protection here (a lender requiring a satisfactory appraisal is part of loan approval), but this is an area where the language matters and buyers should not assume they are fully protected without reviewing the specific contract language with their agent and attorney.

• If the buyer fails to give written notice of termination or extension request by the loan approval deadline, the contingency is deemed waived — and the deposit is at risk
• Sellers can set a shorter loan approval deadline as a negotiating point — this happens in competitive markets where sellers want certainty faster
• Pre-approval is not the same as loan approval. Pre-approval is based on unverified income and assets; full loan approval requires the underwriter to clear all conditions
• If rates rise significantly between contract execution and the approval deadline, buyers locked into a maximum rate in the contract could find themselves unable to qualify

Section 8: Title Evidence

Section 8 governs who pays for title insurance and when the title commitment must be delivered. In most Florida transactions, the seller pays for the owner's title insurance policy and selects the closing agent (the title company). This is the default under FAR-BAR and is customary in most of Hillsborough, Pinellas, Pasco, and Orange counties — though some markets vary by local custom.

Under Section 8, the seller must provide title evidence within a specified period of time. The buyer then has 5 days after receipt of the title commitment to examine it and notify the seller of any title defects. If defects are found, the seller has 30 days to cure them (cure period). If the seller cannot or will not cure the defect, the buyer can cancel and receive a full deposit refund.

Title defects in Florida most commonly include: encroachments found on a new survey, liens not yet satisfied (including HOA liens, code enforcement liens, or contractor liens), easements that affect use of the property, and boundary disputes. Open or expired building permits also routinely surface during title and can trigger the defect cure process.

• Owner's title insurance policy protects the buyer forever — not just at closing. If a title defect surfaces five years after you buy, the title insurer defends the claim
• The lender's title policy is separate and protects only the lender — it is paid by the buyer in most Florida transactions
• A survey is not required by the FAR-BAR contract to close, but lenders often require one and buyers should strongly consider ordering one on any property where boundaries matter
• Municipal lien searches (which uncover code enforcement fines, utility liens, and special assessments) are typically ordered by the title company and are separate from the title commitment

Section 12: The Inspection Period

Section 12 of the AS-IS contract is the buyer's most powerful tool. It gives the buyer the right to terminate the contract for any reason — or no reason at all — during the inspection period and receive their deposits back in full.

The inspection period is negotiated in the contract. In Central Florida and Tampa Bay, 10 to 15 days is the standard range for residential transactions. In competitive markets, sellers may push for shorter periods — 7 days is sometimes requested. Buyers should use every day of the inspection period: general home inspection, WDO (wood-destroying organism / termite inspection), 4-point inspection if it is an older home, wind mitigation report, and any specialized inspections the general inspector recommends (roof, HVAC, structural).

The language in Section 12 is notably strong for buyers. It says the buyer may terminate in their sole discretion if the property is not acceptable. The inspection does not have to reveal a specific dollar threshold of defects. The buyer does not have to give a reason. If they want to walk away during the inspection period, they can — and get their deposits back.

After the inspection period expires, that termination right is gone. This is why buyers should never let the deadline slip without either (a) exercising the termination right, (b) negotiating an extension with the seller in writing, or (c) waiving the period if they are satisfied.

• Days in the FAR-BAR contract are calendar days, not business days, unless stated otherwise. Count carefully
• The inspection period deadline is one of the few truly hard deadlines in the contract — missing it by even one day can cost you your deposit
• The inspection period covers more than physical condition: buyers can investigate permits, HOA rules, insurance availability and cost, flood zone designation, and anything else that affects their decision
• In the AS-IS contract, the seller is not obligated to make any repairs. However, buyers can and do use inspection findings to negotiate a price reduction or seller credit — the seller just has the right to say no and the buyer then decides whether to proceed or cancel

Section 15: Closing Date

Section 15 establishes the closing date — the date by which funds must be received by the closing agent and the deed must be available for recording. In Florida residential transactions, 30 to 45 days from the effective date is typical for financed purchases. Cash transactions can close in as few as 7 to 14 days.

The contract treats time as important but provides for a limited extension window for CFPB compliance. Under the Closing Disclosure rules, the buyer is entitled to receive the CD at least three business days before closing. If the CD is not delivered on time due to lender processing delays, the closing date automatically extends for the period necessary to satisfy that requirement — up to 7 days.

Beyond CFPB extensions, any change to the closing date requires written agreement from both parties. If the closing does not happen by the agreed date (or any extension), either party may have the right to declare the other in default — but the practical first step is almost always a written extension agreed by both parties.

• Sellers: if you need to vacate before closing (moving trucks, new lease start date), build that lead time into the closing date you agree to, not a post-closing occupancy agreement if you can avoid it
• Buyers: lenders do not close on Sundays and many do not close on Saturdays. Make sure your closing date is a business day or plan for the preceding business day
• Title companies in Florida often need 24 to 48 hours after receiving loan documents from the lender to prepare final closing documents. Do not schedule a 9 a.m. closing on the same day the lender is wiring funds
• If a hurricane or severe weather event makes closing impossible on the scheduled date, Section 18 (Force Majeure) provides an extension of up to 7 days for each party affected

Section 17: Default and What Happens to the Deposit

Section 17 covers default — what happens if one party fails to perform. The remedies differ depending on which party defaults.

If the buyer defaults: the seller's typical remedy is to retain the deposit as liquidated damages. This is the default election in the FAR-BAR contract. The seller must make this election within 30 days. If the seller retains the deposit as liquidated damages, they give up the right to sue the buyer for specific performance or additional damages — the deposit is the ceiling on recovery.

If the seller defaults: the buyer has two options. First, the buyer can demand return of their deposits — the escrow holder releases the funds without further dispute. Second, the buyer can pursue specific performance — a court order compelling the seller to sell the property at the agreed price. Specific performance is available to buyers in Florida under the contract and is occasionally sought when the property has unique value that money cannot replace.

One practical note: deposit disputes between buyer and seller often end up in mediation before litigation. The FAR-BAR contract requires the parties to attempt mediation if there is a dispute over deposit. The escrow holder (typically the title company or listing broker) cannot release disputed funds until both parties agree in writing, a court orders release, or the dispute is otherwise resolved. Deposits do not just get handed back automatically when a deal falls apart — if there is a dispute, the funds sit in escrow until the dispute is resolved.

• The seller retaining the deposit as liquidated damages is a pre-agreed remedy built into the contract — it is not a penalty, it is compensation for taking the home off the market
• Buyers who default close to closing lose more than just the deposit — they may have spent money on inspections, appraisal, and title costs that are also not recoverable
• Sellers who default face specific performance claims — a court could order them to sell the property at the contract price, which can be very consequential if market values have moved since the contract was signed
• Bad faith disputes over deposits can lead to fee-shifting in litigation — the losing party may be ordered to pay attorney fees

Buyer Contingency Levers Beyond the Basics

The inspection period and financing contingency are the two standard contingency levers every buyer has. The FAR-BAR contract also accommodates additional contingencies through optional addenda and riders.

The appraisal contingency is one important addition not automatically included in the base AS-IS contract. Buyers who want explicit protection if the home appraises below the purchase price should have their agent add an appraisal contingency addendum. Without it, a low appraisal may only provide protection under the financing contingency language — and only if the lender declines to fund due to the appraisal, which is not guaranteed.

The home sale contingency — making the purchase contingent on the buyer selling their current home — is another optional addition. Many sellers resist accepting contracts with home sale contingencies in a competitive market, but in slower markets they are negotiable. If this contingency is relevant to you, your agent can structure it to be as clean as possible.

Comprehensive Riders: Post-Occupancy, Kick-Out, and Back-Up Contracts

The FAR-BAR form comes with a library of riders — optional addenda with letter designations that cover specific situations. Three come up regularly in Central Florida and Tampa Bay transactions.

Rider U — Post-Closing Occupancy by Seller. This rider allows the seller to remain in the property after closing for a defined period, paying the buyer a daily rent. It is common when the seller needs bridge time between the closing of their current home and the closing of their next purchase. Post-occupancy arrangements carry risk for buyers (they become landlords) and should have clear security deposit terms, a defined move-out date, and language about what happens if the seller fails to vacate.

Rider W — Back-Up Contract. This rider allows a seller to accept a secondary offer while a primary contract is in effect. The back-up contract is contingent on the primary contract failing (by cancellation, default, or other termination). The secondary buyer can withdraw their offer at any time before receiving notice that the primary contract has ended. Sellers use this to maintain a safety net without formally canceling a deal in progress.

Rider X — Kick-Out Clause. The kick-out rider allows the seller to continue marketing even with a signed primary contract in place. If the seller accepts a back-up offer, the primary buyer receives written notice and has 3 days to respond: either make an additional deposit in the amount specified in the rider and waive all contingencies (inspection, financing, sale of current home), or decline and receive a full deposit refund. If the buyer meets the deposit requirement, the contingencies are waived and the primary contract survives. If not, the seller proceeds with the back-up offer.

Kick-out clauses are most commonly used when the primary contract includes a home sale contingency — the seller accepts the offer but protects their ability to move forward if a non-contingent buyer comes along. Buyers should read kick-out rider language carefully before signing; the 3-day response window is short and the stakes are real.

Putting It Together for Your Transaction

The FAR-BAR AS-IS contract is a well-structured document, but it rewards close reading. The deadlines are real, the contingency language is specific, and the default remedies favor whoever acted correctly over whoever did not.

For buyers in Central Florida and Tampa Bay, the most important habits are: count every calendar day from the effective date, do not let the inspection period deadline slip, get your loan approval letter before the financing contingency expires, and review any riders your agent attaches before you sign.

For sellers, the contract structure is generally favorable once you are in a signed agreement — the liquidated damages provision and the limited repair obligations under the AS-IS form are protective. The risks are concentrated in the inspection period, where a buyer can walk for any reason, and in the financing contingency window, where a buyer who cannot get approved can exit cleanly.

If you are preparing to buy or sell in Tampa Bay, St. Petersburg, or Central Florida and want to walk through the specific terms that apply to your transaction, reach out. I work with these contracts daily and can help you understand what you are signing before you commit.