© 2008 by South-Western, Cengage Learning Chapter 9 Chapter 9 Charles J. Jacobus Thomas E. Gillett

© 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 Commits the parties to the terms. Allows time for the parties to perform. Purpose of Sales Contracts

© 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 Moving Day 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

© 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

© 2008 by South-Western, Cengage Learning 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 F Waiver of Certain Rights Regarding Lead Based Paint 12. Warranty 13. Taxes and Prorations

© 2008 by South-Western, Cengage Learning GAR Form F Risk of Damage to Property

© 2008 by South-Western, Cengage Learning GAR Form F 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 F 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 F 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 F Exhibits and Addenda

© 2008 by South-Western, Cengage Learning 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

© 2008 by South-Western, Cengage Learning Letter of Intent Letter of Intent Expresses mutual intention to buy, sell, lease, develop, or invest Outlines terms No obligation created

© 2008 by South-Western, Cengage Learning Practicing Law 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 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.

© 2008 by South-Western, Cengage Learning Deed vs. Installment Contract

© 2008 by South-Western, Cengage Learning 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 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 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”