Whether you're downsizing an empty nest or have outgrown a starter home, selling your house or condo is complicated and has legal ramifications. Although the steps involved in selling a home are similar regardless of where in the U.S. you live, Florida's real estate laws and practices are unique in some respects.
Becoming familiar with the process early on will help you avoid problems. Here’s an overview of the basics—from working with a real estate agent to making legally required disclosures to closing the deal.
Working With a Florida Real Estate Agent
Most people selling their home in Florida work with a licensed real estate broker or agent. A good real estate agent will help price your house, based on a comparative market analysis, effectively market your house to prospective buyers, and handle other tasks such as reviewing house purchase documents and negotiating with buyers to close the sale.
Before signing a listing agreement (discussed below) with any agent, get references from other home sellers and check customer reviews on sites such as Zillow and Realtor.com. Doublecheck their licenses at the Florida Department of Business & Professional Regulation's Licensee Search.
Signing a Listing Agreement in Florida
Once you find a real estate agent with whom you want to work, you’ll sign a “listing agreement” giving the agent the right to market and handle the sale of your house. Most real estate agents use standard forms created by their state or local Realtor association, such as the Florida Realtors.
Listing agreements typically cover the following terms:
- Amount of commission that you (the seller) will pay. This typically ranges from 5-6% of the house sales price and is split between your real estate agent and the buyer’s agent.
- The type of listing. Most listing agents will want you to sign an exclusive right to sell listing, which obligates you to pay a commission to the agent regardless of who brings in the buyer. Other arrangements are possible, however, such as an open listing, in which you agree to pay a commission to whichever agent brings in a buyer, or an exclusive agency listing, in which you agree that your agent is the only agent authorized to sell your house, but that you will pay a commission only if the agent brings in the buyer (not, for example, if you find a buyer on your own).
- Duration of listing. In all cases, the listing agreement will cover a set amount of time, such as 90 days.
- Listing price. Your agent will recommend the appropriate selling price by comparing prices of similar properties (“comps”) that have been listed in your immediate area, based on professional experience and data found in a Multiple Listing Service (MLS). To educate yourself as to whether the agent is recommending an appropriate price, the National Association of Realtors’ website is a good source of information on prices of houses currently on the market, and websites such as Zillow provide data on actual prices of properties already sold.
- Items included or not included in the sale. For example, you might plan to leave behind a built-in dishwasher (which is therefore part of the property that the agent is contracted to sell), but exclude a refrigerator that you plan to move to your new home.
- Duties and obligations of seller and real estate agent. Your agreement will spell out how the real estate agent will list or market your house, what type of insurance you must maintain on the property, and what disclosures you must make.
Making Real Estate Disclosures in Florida
State case law in Florida (Johnson v. Davis, 480 So.2d 625 (Fla. 1985)) requires sellers to disclose any known facts or conditions about their property that have a substantial impact on its value and that others cannot easily observe. The seller will fill out a disclosure form (which your agent can supply you with), providing details on the property including:
- whether specific appliances need repair
- defects in the electrical, plumbing, and heating and cooling systems
- environmental conditions, such as termites or asbestos
- structural issues, such as cracks in the foundation or leaks in the roof
- legal issues, such as deed restrictions, and
- other specified information about the property.
There are a few more disclosures that a seller is required by law to make. The seller will need to fill out a tax disclosure form for the buyer, stating that property taxes might change after the purchase (see Fla. Stat. § 689.261).
The seller will also need to disclose whether the property has high levels of radon (see Fla. Stat. § 404.056(5)), whether it is affected by coastal erosion and federal, state, or local regulations governing coastal property (see Fla. Stat. § 161.57), and whether the property is part of a mandatory homeowner's association (see Fla. Stat. § 720.401).
If you are selling a condo, then you have additional disclosures to make, such as property management details, information about time shares, and the developer's information (see Fla. Stat. § 718.503).
In addition, if your house was built before 1978, you must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website for details.
Responding to Buyers' Offers, Counteroffers, and Purchase Agreements
A buyer who wants to purchase a particular Florida home will make the seller a written offer, specifying the price, proposed down payment, any contingencies to closing (such as receipt of a satisfactory inspection report completed by an inspector the buyer hires or the buyers' arranging financing or selling their current house), and so on.
You may reject an offer outright, accept it as is, or (more typically) respond to a buyer’s offer with a counteroffer. A counteroffer accepts some or most of the offer terms, but suggests changes to others, such as a higher price or a closing date that’s sooner than the buyer proposed.
A legally binding contract, typically called a purchase agreement, is formed when you accept and sign a buyer's final offer (agreeing to any changes from the original offer). Your agreement will contain key terms of the sale, such as the agreed-upon price, contingencies, financing terms, dispute resolution, and closing date. Once a purchase agreement is signed by both buyer and seller, the transaction will go into escrow.
Entering Escrow in Florida
Escrow is the time period between signing the purchase agreement and closing on the house. You and the buyer will agree on an escrow or title agent; a neutral third party to serve as intermediary and supervise the process (preparing title reports, removing buyer contingencies, holding and disbursing funds, and so on).
The buyer typically has a lot more to do during this time period than the seller. By the close of escrow, the buyer will need to finalize financing, remove all contingencies, have the house appraised (normally required by mortgage lenders), and get title insurance—usually under the deadlines set by the purchase agreement.
Issues often come up that require negotiating, such as who will pay for repair problems identified in an inspection report. The buyer might, after viewing the report, insist that you pay to remedy a home defect or lower the purchase price. If you cannot reach an acceptable agreement, the buyer likely has the right to back out of the deal without forfeiting the earnest money deposit.
Attending the Closing of Your Florida Home
By the close of escrow (known as the closing or settlement), you and the buyer should have fulfilled all the terms of your purchase agreement. At the closing itself (sometimes a meeting of the parties, other times conducted in separate locations), all final documents and funds will be exchanged between buyer and seller. The buyer pays you the purchase price, and you give the buyer a deed and other transfer documents and clear title to the house or condo. You pay off any outstanding loans on your property and pay commissions to the real estate agents (per your listing agreement).
The closing normally takes place over the course of one day, though it’s possible for it to be spread over several days.
Sellers do not usually need to be present at a Florida closing so long as all costs are paid and documents are signed (in some cases virtually). Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. The title company will record the new deed in the buyers' name at a local government office, and the home is officially theirs.
For more details, see Escrow and Closing in Buying or Selling a Home.
Working With a Florida Real Estate Lawyer
Unlike some states, Florida does not require that sellers involve a lawyer in the house-selling transaction. Nevertheless, you might decide to engage a lawyer at some point—for example, to review the final contract or to assist with closing details.
Or, you might want a lawyer’s help in uncommon situations, such as if you are drafting a lease agreement allowing you to rent the home back for an extended period of time after the closing, or if problems show up on the title report, such as a lien on your property.
And if you are selling your home without a real estate agent (a “for sale by owner” or FSBO), it can be useful to hire an attorney to help with the legal paperwork.
Check out our lawyer directory, to find an experienced real estate attorney in Florida.
More Information on Selling a House
The Residential Real Estate section includes a variety of useful articles on all aspects of the house selling process, including marketing strategies and tax issues.