Georgia Real Estate Contracts

About 15 changes have been made to the Purchase and Sale Contracts for residential real estate in Georgia for 2007. Some of the changes are more significant to parties involved in the transaction so we will cover the important changes here.

The biggest change that was made is in the method of payment section of the contract. Under the old sales contract, a buyer had until up to the day of closing to qualify for the loan and this did not provide any protection for the seller if the buyer could not qualify at the last minute. Sellers could have moved or purchased another home and been left to clean up the mess. The new contracts have a financing contingency period. This places more responsibility on the buyer to obtain a loan in a negotiated time period. If during that time a buyer is denied a loan, they can simply provide a letter from the lender stating as much. If however, the contingency period expires and then the buyers loan is denied the buyer will be deemed to be in breech of contract. What this means is that buyers will be held more accountable during the transaction and should begin the loan application process prior to making an offer on a home.

A new section was added to inform the buyer of there responsibility to become familiar with the neighborhood and any adverse conditions that may affect property values.

Another big change is that buyers will now be responsible for obtaining a termite clearance letter. Now termites are considered to be like any other adverse condition that the buyer is responsible for investigating. In previous contracts the seller was required to provide the termite letter officially known as a "Georgia Wood Infestation Report".

The Right to Terminate section has been renamed "Due Diligence Period". This makes the residential real estate contracts more consistant with the commercial real estate forms.

Lead Based Paint - In previous forms of the contract a buyer had not less than 10 days to complete an inspection for lead based paint hazards. The new contracts treat lead based paint like any other like any other adverse property condition and should be dealt with during the due diligence period or in the time frame negotiated in the right to request repairs section. The Seller's Property Disclosure statement eliminates the lead based paint disclosures and now a lead based paint exhibit must be attached to the contract of all homes built before 1978.

Notice can now be given via e-mail provided the broker's email address section of the signature page of the contract is filled out with the proper e-mail address.

These are the major changes reflected in the new residential real estate contracts provided by the Georgia Association of Realtors for use in my area of Alpharetta and Sandy Springs as well as acroos the rest of the state of Georgia. If you plan on buying or selling a home, make sure your real estate agent understands these differences from previous versions to protect you from possible hazards prior to closing.

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