Chapter 1
Foundations of Real Property
Course: Georgia Real Estate Exam Prep
Subject: Georgia State Salesperson Exam Prep
Chapter: The Georgia Purchase And Sale Agreement Of Georgia Real Estate Salesperson Exam Prep
- The purchase agreement is the roadmap for the entire transaction. Understanding its key components is critical.Parties: Full legal names of all buyers and sellers.Property Description: The full legal description.Purchase Price and Financing: The total price and how the buyer will pay (cash, conventional loan, FHA, etc.).Earnest Money: The amount, who holds it (typically the listing broker's trust account), and the conditions for its release or forfeiture.Due Diligence Period (GA "Buyer Beware" Law): A negotiated number of days for the buyer to inspect the property. The buyer can terminate for any reason or no reason during this period and receive their earnest money back. This is a powerful right for Georgia buyers.Contingencies: Clauses that make the contract conditional.Financing Contingency: Protects the buyer if they cannot obtain a loan.Inspection Contingency: Allows the buyer to conduct inspections and request repairs or cancel.Appraisal Contingency: Protects the buyer if the appraisal comes in lower than the purchase price.Sale of Buyer's Home Contingency: Makes the contract dependent on the sale of the buyer's current home.Property Disclosures: The seller is required to complete a Seller's Property Disclosure Statement detailing known material defects. Note: This is separate from an inspection.Closing and Possession Dates: When the title transfers and when the buyer can move in.Prorations: How ongoing expenses like property taxes and HOA fees will be divided between the parties at closing.Liquidated Damages Clause: Specifies that the earnest money is the sole remedy if the buyer defaults.
- Parties: Full legal names of all buyers and sellers.
- Property Description: The full legal description.
- Purchase Price and Financing: The total price and how the buyer will pay (cash, conventional loan, FHA, etc.).
- Earnest Money: The amount, who holds it (typically the listing broker's trust account), and the conditions for its release or forfeiture.
- Due Diligence Period (GA "Buyer Beware" Law): A negotiated number of days for the buyer to inspect the property. The buyer can terminate for any reason or no reason during this period and receive their earnest money back. This is a powerful right for Georgia buyers.
- Contingencies: Clauses that make the contract conditional.Financing Contingency: Protects the buyer if they cannot obtain a loan.Inspection Contingency: Allows the buyer to conduct inspections and request repairs or cancel.Appraisal Contingency: Protects the buyer if the appraisal comes in lower than the purchase price.Sale of Buyer's Home Contingency: Makes the contract dependent on the sale of the buyer's current home.
- Financing Contingency: Protects the buyer if they cannot obtain a loan.
- Inspection Contingency: Allows the buyer to conduct inspections and request repairs or cancel.
- Appraisal Contingency: Protects the buyer if the appraisal comes in lower than the purchase price.
- Sale of Buyer's Home Contingency: Makes the contract dependent on the sale of the buyer's current home.
- Property Disclosures: The seller is required to complete a Seller's Property Disclosure Statement detailing known material defects. Note: This is separate from an inspection.
- Closing and Possession Dates: When the title transfers and when the buyer can move in.
- Prorations: How ongoing expenses like property taxes and HOA fees will be divided between the parties at closing.
- Liquidated Damages Clause: Specifies that the earnest money is the sole remedy if the buyer defaults.