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Chapter 9Chapter 9

Charles J.Jacobus

Thomas E.Gillett

© 2008 by South-Western, Cengage Learning

Georgia Real EstateGeorgia Real EstateAn Introduction to the ProfessionAn Introduction to the Profession

Seventh EditionSeventh Edition

Chapter 9Chapter 9

Real Estate Sales ContractsReal Estate Sales Contracts

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Commits the parties to the terms.

Allows time for the parties to perform.

Purpose of Sales ContractsPurpose of Sales Contracts

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GAR Form F20GAR Form F20

1. Purchase and Sale1. Purchase and Sale

Buyer agrees to buy, Seller agrees to sell

Legal description

2. Purchase Price2. Purchase Price

Written like a check

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Moving Day

GAR Form F20GAR Form F20

3. Amount & Deposit of Earnest Money3. Amount & Deposit of Earnest Money

Holder designatedHolder designated

5 Banking days from binding agreement5 Banking days from binding agreement

Allows interest bearing accountAllows interest bearing account

4. Date of Closing and4. Date of Closing and

Transfer of PossessionTransfer of Possession

Unilateral extensionUnilateral extension

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GAR Form F20GAR Form F20

5. Sellers Contribution At Closing5. Sellers Contribution At Closing

6. Method of Payment6. Method of Payment

Financing Contingency PeriodFinancing Contingency Period

7. 7. Closing AttorneyClosing Attorney

8. Seller’s Property Disclosure8. Seller’s Property Disclosure

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GAR Form F20GAR Form F20

9. Inspection9. Inspection

10. Property Sold with…10. Property Sold with…

Right to Request RepairsRight to Request Repairs

Subject to Due Diligent PeriodSubject to Due Diligent Period

““As-Is”As-Is”

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GAR Form F20GAR Form F20

11. Waiver of Certain Rights Regarding Lead Based Paint

12. Warranty

13. Taxes and Prorations

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GAR Form F20GAR Form F20

14. Risk of Damage to Property14. Risk of Damage to Property

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GAR Form F20GAR Form F20

15. Entitlement to and Disbursement of 15. Entitlement to and Disbursement of Earnest MoneyEarnest Moneywithdrawal of an offerwithdrawal of an offer

rejection of an offerrejection of an offer

closing of the contractclosing of the contract

separate written agreement separate written agreement

court ordercourt order

interpleaderinterpleader

reasonable interpretationreasonable interpretation

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GAR Form F20GAR Form F20

16. Agency and Brokerage• working with vs. working for• compensation

17. Disclaimer

18. Notices• in writing• methods of delivery

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GAR Form F20GAR 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

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GAR Form F20GAR Form F20

20. Exhibits and Addenda

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Federal ClausesFederal Clauses

Amendatory LanguageFHA & VA

Insulation Disclosures

Lead Based Paint Disclosure“Protect Your Family from Lead in Your Home”

10 day inspection period

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ContractsContracts

Preprinted Clauses Addendums & Special Stipulations

Riders

Negotiation

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Letter of IntentLetter of Intent

Expresses mutual intention to buy, sell, lease, develop, or invest

Outlines terms

No obligation created

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Practicing LawPracticing 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.

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Other types of ContractsOther types of Contracts

Installment ContractsDeed 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 ContractDeed vs. Installment Contract

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Other types of ContractsOther types of Contracts

Option ContractsUnilateral

Buyer has the right not the obligation to buy

Seller must sell

Payment made to Seller

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Other types of ContractsOther types of Contracts

Lease-OptionBuyer has right to buy at preset term

Option fee must make economic sense

Right of First RefusalCommon to a lease

Valid offer from a purchaser

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Esign ActEsign Act

Effective as of March 1, 2001

Authorizes electronic agreements

Allows for electronic signatures

State may supercede this legislation

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Key TermsKey Terms

Binder

Counteroffer

Default

Earnest money deposit

Equitable title

Installment contract

Lease-option

Option contract

Right of first refusal

“Time is of the essence”