Real estate sales are different from state to state. Procedures are different, how and when we go under contract is different and who closes the sale differs. I am licensed to sell real estate in Florida. I have never sold anywhere else. Based on stories I have heard, observations I have made and experiences REALTORS from other states have shared with me, I believe Florida has gotten it right when it comes to contract to close procedures.

I have contacts with REALTORS across the country. For the sake of brevity, I am going to discuss Massachusetts and New York in comparison to Florida. It is my understanding that these 2 sales handle real estate transactions similarly.

In Florida, title companies are typically used to close/complete the sale. The title company is a neutral party in the sale. They perform lien searches to ensure there are no liens against the property that a buyer may be held responsible for, make sure the chain of title is clean (no one has claim to the property), order payoffs, prepare and record the deed, etc. They basically close out the sale. In Massachusetts and NY, attorneys handle closings. Attorneys also handle contracts.

In Florida, REALTORS handle contracts. In most instances, contracts that have been drafted and approved by The Florida Bar. The steps of a sale in Florida are pretty straight forward. Buyer finds a house they like, they make a written offer on a contract and buyer and seller agree to terms. The terms are spelled out on the contract. Terms include sale price, closing date, escrow deposit and how it is handled in case of buyer or seller default, inspection periods, financing contingencies (including financing type and loan commitment deadlines), repair limits, etc. It is all spelled out and agreed to in writing by all parties prior to moving forward with inspections, appraisals and loan approval. Once the contract is executed by the buyer and sellers, inspections, appraisal, and all steps that lead to closing are completed.

In Massachusetts and New York, buyers and sellers come to a written agreement on price, inspections are performed, then an attorney drafts the contract to purchase. As an agent that works in residential sales in Florida and has only worked in Florida, I find this mind blowing.

Here’s why: I have heard stories of buyers and sellers coming to agreed upon purchase price and finding other terms in the contract that both parties haven’t agreed upon. One example of this includes a change in buyer financing (i.e. going from 5% down on conventional financing to 0% down on a USDA loan). For a seller, this could be alarming. The seller agreed to a purchase price based on one set of terms and is presented a different set of terms at the time of entering into contract. Terms that could appear less appealing or “safe” than what was anticipated. Another example I have heard is buyer and seller agreeing to a contract price and when the contract is presented, buyer sees a clause stating they would lose their entire escrow deposit if financing was not in place within 20 days of contract. (most lenders need 30-45). I’m sure most times these items can get ironed out. Sometimes they don’t though. Sometimes weeks can be lost “renegotiating” terms that, in Florida, would have been ironed out up front – before a buyer invests time and energy on the house and more importantly spends hundreds of dollars on inspections.

I am grateful to be able to sell real estate in Florida. It seems to me it is more cut and dry, straightforward, and certain when a buyer and seller have a binding contract with all the terms to the agreement spelled out prior to any actions being taken. I can only think it cuts stress levels, too. If I were selling real estate in MA or NY I may think differently.  As a Florida Realtor, I would be extremely hesitant to allow a buyer to spend monies on inspections prior to being in a fully executed contract. I understand an agreement has been made by the parties in NY and MA, but without having all the terms to the contract laid out and agreed to beforehand seems like a risky endeavor to both parties in the transaction.

I’d be interested to hear from other REALTORS about contract to close procedures in your state, and what I’ve gotten right and what I may have gotten wrong about sales in MA and NY based on the information and examples provided to me by other in the field.