Florida Residential As-Is Contract Series | Part 3: Paying for the Property

By: Brian Stephens and Gabriella Carlson*

For residential sales transactions in Florida, one contract form gets used more than any other –the Florida As Is Residential Contract for Sale and Purchase.  The drafters intended it to be simple: just fill in the blanks.  But, those blanks can be confusing.  And that confusion, combined with time pressure and client expectations, can lead to errors, lost deals, and liability for agents and their clients. 

We’ve crafted this Florida Residential As‑Is Contract Series for brokers and others who complete this form for their clients, as well as owners and prospective buyers who want to navigate a residential purchase and sale transaction on their own. In each article, we focus on one section of the form, moving through it step by step. We’ll explain what each section does, where people commonly go wrong, and how to get it right.

If you are looking for insight on a particular section, you can find all currently available articles from this series on our Insights page.

Hopefully, you find this series helpful.  With questions, suggestions, or requests as to alternative series, feel free to contact me directly at Brian.Stephens@Lowndes-law.com.

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Part 3: Paying for the Property

Florida “As-Is” Contract, Line-by-Line: Lines 27–42 (“Purchase Price, Deposits, and Loan Amount”)

If the property description defines what is being sold, this paragraph defines how the transaction will be paid for. The contract requires the parties to state the total purchase price, specify the buyer’s initial deposit and any additional deposits, identify the remaining balance due at closing, designate an escrow agent, and state relevant financing terms. Together, these provisions form the economic framework for the transaction.

Determining the Deposit Amount

The deposit serves two important functions: it demonstrates the buyer’s commitment to the transaction and provides the seller with financial protection if the buyer later defaults. In terms of what the deposit amount should be, there is no prescribed statutory percentage nor does the form itself establish one. However, earnest money deposits typically range from 1% to 3% of the purchase price, with larger deposits becoming appropriate in more competitive markets. This general principle is consistent with the market in Florida. Many residential transactions do not need a full 10% deposit to be taken seriously, but they also rarely succeed with a “token” deposit.

The rule-of-thumb is that the deposit should be meaningful, both as a percentage of the purchase price and in absolute dollars, while remaining consistent with local market expectations. Realistically, this often looks like deposit amounts exceeding $2,500 on lower-priced properties, even reaching five figures on deals exceeding $1 million.

Avoiding Deposit Date Issues

The deposit deadlines deserve just as much attention as the deposit amounts. Two seemingly minor drafting oversights tend to cause a surprising number of disputes.

First, the parties must specify when the initial deposit is due. The form allows for the deposit to either accompany the offer or be delivered within a stated number of days after the Effective Date—the date the contract is signed. If neither box is checked, the form defaults to the latter option; and, if no number of days is entered, the deposit is automatically due three (3) days after the Effective Date. Agents routinely assume that a deposit check will be delivered later without realizing the default deadline already applies, leaving the buyer technically in default mere days after entering into the agreement.

Second, if the transaction calls for an additional deposit, the parties may specify when it is due. However, the contract also establishes a default deadline for this additional deposit, defaulting to ten (10) days after the Effective Date if left blank. As a practical matter, any additional deposit should typically become due at or shortly after the end of the due diligence period, when the buyer has decided to move forward with the transaction.

Who Holds the Deposit?

This paragraph is also where the parties name the Escrow Agent who will hold the deposit.  In many Florida residential closings, the entity serving as the title or closing agent also serves as the Escrow Agent. The party paying the title insurance premium typically gets the first choice in selecting the title company; however, this is subject to lender approval, and the parties should agree on the selected agent. Additionally, local customs vary, and this point can always be negotiated between the parties and altered in the contract.

Don’t Overlook the Financing/Loan Amount Blank

Line 39’s “Financing / Loan Amount” blank is often misunderstood as merely informational, but it actually defines the specific financing the buyer must seek under the financing contingency. This financing contingency is a contractual promise that may allow a buyer to terminate the contract without forfeiting their deposit if, despite reasonable efforts, they are unable to obtain financing according to the contract’s specified terms. These terms include the stated Loan Amount and an interest-rate ceiling, or the default “prevailing rate” if left blank. Accordingly, buyers should be careful to accurately reflect the financing they intend to obtain in the contract.

From a drafting strategy standpoint, buyers often prefer to specify a higher loan-to-value ratio (for example, financing 95-98% of the purchase price), as doing so preserves greater flexibility. By contrast, sellers often prefer more conservative, realistic financing terms, as they reduce the likelihood that a buyer can terminate the contract by simply claiming financing failure. 

Key Takeaways

These may seem like routine blanks on a standard form, but they often determine whether a transaction moves smoothly to closing or becomes the subject of a dispute. Be mindful of the following instructions to help close your deals.

1. Treat Lines 27–42 as the financial foundation of the purchase price, deposit structure, financing terms, and escrow arrangements are the terms most likely to determine whether the transaction actually closes.
2. Use a deposit that is meaningful both as a percentage and in absolute dollars, while keeping in mind that overlooking the contract’s default timing provisions can unintentionally accelerate deadlines.
3. Draft the loan amount thoughtfully, because it can operate as a practical boundary on the buyer’s financing contingency. Buyers generally benefit from realistic, higher loan-to-value flexibility, while sellers benefit from conservative terms that limit a buyer’s ability to back out later on the basis of insufficient financing.

*Gabriella Carlson, a summer law clerk, assisted with this article.