Chapter 9
Thomas E.
Gillett
Charles J.
Jacobus
© 2008 by South-Western, Cengage Learning
Georgia Real Estate
An Introduction to the Profession
Seventh Edition
Chapter 9
Real Estate Sales Contracts
© 2008 by South-Western, Cengage Learning
Purpose of Sales Contracts
Commits the parties to the terms.
Allows time for the parties to perform.
© 2008 by South-Western, Cengage Learning
GAR Form F20
1. Purchase and Sale
Buyer agrees to buy, Seller agrees to sell
Legal description
2. Purchase Price
Written like a check
© 2008 by South-Western, Cengage Learning
GAR Form F20
3. Amount & Deposit of Earnest Money
Holder designated
5 Banking days from binding agreement
Allows interest bearing account
4. Date of Closing and
Transfer of Possession
Unilateral extension
Moving
Day
© 2008 by South-Western, Cengage Learning
GAR Form F20
5. Sellers Contribution At Closing
6. Method of Payment
Financing Contingency Period
7. Closing Attorney
8. Seller’s Property Disclosure
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GAR Form F20
9. Inspection
10. Property Sold with…
Right to Request Repairs
Subject to Due Diligent Period
“As-Is”
© 2008 by South-Western, Cengage Learning
GAR Form F20
11. Waiver of Certain Rights Regarding Lead
Based Paint
12. Warranty
13. Taxes and Prorations
© 2008 by South-Western, Cengage Learning
GAR Form F20
14. Risk of Damage to Property
© 2008 by South-Western, Cengage Learning
GAR Form F20
15. Entitlement to and Disbursement of
Earnest Money
withdrawal of an offer
rejection of an offer
closing of the contract
separate written agreement
court order
interpleader
reasonable interpretation
© 2008 by South-Western, Cengage Learning
GAR Form F20
16. Agency and Brokerage
• working with vs. working for
• compensation
17. Disclaimer
18. Notices
• in writing
• methods of delivery
© 2008 by South-Western, Cengage Learning
GAR Form F20
19. Other Provisions
Transfer of warranties
Repairs “workman like manner”
Entire Agreement
Survival Clause
Georgia Law
Time is of the essence
Terminology
Binding Agreement Date
All parties cooperate
Limit of liability to GAR
© 2008 by South-Western, Cengage Learning
GAR Form F20
20. Exhibits and Addenda
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Federal Clauses
Amendatory Language
FHA & VA
Insulation Disclosures
Lead Based Paint Disclosure
“Protect Your Family from Lead in Your
Home”
10 day inspection period
© 2008 by South-Western, Cengage Learning
Contracts
Preprinted Clauses
Addendums & Special Stipulations
Riders
Negotiation
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Letter of Intent
Expresses mutual intention to buy,
sell, lease, develop, or invest
Outlines terms
No obligation created
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Practicing Law
The real estate agent determines the
business details of the transaction –
Do not practice law!
A real estate license is not a license
to practice law.
© 2008 by South-Western, Cengage Learning
Other types of Contracts
Installment Contracts
Deed is not delivered at closing
Vendee & vendor
Assured future interest in legal title.
Title held by the party with the deed.
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Deed vs. Installment Contract
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Other types of Contracts
Option Contracts
Unilateral
Buyer has the right not the obligation to buy
Seller must sell
Payment made to Seller
© 2008 by South-Western, Cengage Learning
Other types of Contracts
Lease-Option
Buyer has right to buy at preset term
Option fee must make economic sense
Right of First Refusal
Common to a lease
Valid offer from a purchaser
© 2008 by South-Western, Cengage Learning
Esign Act
Effective as of March 1, 2001
Authorizes electronic agreements
Allows for electronic signatures
State may supercede this legislation
© 2008 by South-Western, Cengage Learning
Key Terms
Binder
Counteroffer
Default
Earnest money
deposit
Equitable title
Installment contract
Lease-option
Option contract
Right of first refusal
“Time is of the
essence”
© 2008 by South-Western, Cengage Learning