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Georgia Real Estate Contract Details


Dear Home Buyer,

When it comes time to submit a contract on a home, I want you to be knowledgeable about all of the terms that you are agreeing to.

Below is a link where you can print out draft copies of the standard GAR (Georgia Association of Realtors) contract.

I also go through many of the items point by point so there are no surprises.

This is kind of long and tedious, but contracts are legally bindings agreements that should be taken very seriously.

Call me if you have any questions.


Tim Maitski
Atlanta Communities




Print Out the Sample Contract and Follow Along the Point by Point Explanations

Click Here to Download Contract


Page 1, 4. Closing Costs. Seller's Contributions at Closing


This is where you can have the seller  pay some of the closing costs.  The contract is written so that the buyer is responsible for all the costs of the transaction except for the realtor commissions and some of the transfer taxes.

You have to state a specific amount.  If closing costs are less than that amount, the buyer doesn't get any refund so you should know upfront from you lender how much to expect in closing costs.  Closing costs include discount points that are used to lower the interest rate.

The seller doesn't actually write a separate check for these items.  They are deducted from their side of the balance sheet which results in them walking away with less.

The seller is mainly concerned about their bottom line, the amount that they walk away with.  Don't get too bogged down on the specifics of who pays what.  All that really matters is the net amount.  The seller is just going to add up all of the costs that they need to pay and look at what they are left with.

An offer of $400,000 with the seller paying $5,000 in closing costs is the same to the seller as an offer for $395,000 with them paying zero closing costs.

Therefore, if you really think it through, the buyer is paying for everything one way or another.  Having the seller pay closing costs just means that the price will be higher and therefore the amount financed will be higher and therefore the Buyer will in fact be financing those closing costs over the length of the mortgage.

If you ask the seller to pay some of the closing costs, that leaves more money in the pocket of the buyer.  But the Buyer has a higher monthly payment.


Page 1, 5.b. Possession After Closing


The best situation for the Buyer is to take possession immediately after closing. Just before the closing, you do a final walk-thru with the property empty.  This allows you to know exactly what you are getting before you sign off on all the paperwork.  If there was any damage done during the move out process, you can deal with it at the closing or refuse to close.

In Georgia, it is customary in many cases to do the closing and then allow the seller up to 48 hours to move out before handing over possession to the Buyer.  The seller doesn't want to have all of their possessions on a moving truck and then find out at the last minute something went wrong with the buyer's financing.

The negative aspect of giving the seller a few days to move out after the closing is that the buyer takes the risk that damage might occur during the move out and then they aren't in much of a position to do anything about it.

If it's something that the seller is insisting on to make the deal happen, then you want to make sure you include the "Temporary Occupancy Agreement" that spells out the details of who is responsible for certain things.


Page 1, 8. Earnest Money


Earnest money is the deposit you put up front showing that you are "earnest".  It's the amount of money that you will forfeit if you default on the contract.

Usually  1% of the purchase price is a reasonable amount. So on a $300,000 home, earnest money would be around $3000. 

The higher your earnest money, the stronger your offer might look.  If you just put up $500 earnest money, that won't give the seller much confidence.  That means that if you walk away they only would get $500 for having their home off the market during that time.

If the closing date will be more than 45 days in the future, the seller will usually want more earnest money.  This is because the seller will be losing a lot of potential buyers during that time when their home will be off the market.

Earnest money isn't deposited until after the binding agreement date.  It's usually held in the buyer agent's broker's escrow account.  The buyer does not get interest on it.


Page 1 9. Inspection and Due Diligence


The Due Diligence Period is the time period during which the Buyer can do any inspections or research to decide whether they want to actually buy the property.  It starts on the Binding Agreement Date.

Before the end of the Due Diligence Period, the Buyer can try to negotiate an "Amendment to Address Concerns".   This is where you can request the seller to fix certain items before closing or maybe adjust the purchase price or seller paid closing costs in lieu of repairs.  Or the Buyer can decide to terminate the contract by sending a  Termination and Release Notification to the seller before the end of the Due Diligence Period.

The days of the Due Diligence Period are full days and it ends at midnight of the last day.  Therefore, a contract signed on Monday at 3pm with a two day due diligence period would give the buyer until midnight on Wednesday.

The length of the Due Diligence Period is negotiable.  A usual compromise is between 7-14 days. 

Remember, the seller doesn't really have a solid contract until this period is over because the Buyer can terminate for any or no reason at all.  So trying to get a 21 day due diligence period is going to be very difficult.


Page 1, 12.  Time Limit of Offer

You can try to convey some urgency by putting a time limit on the offer.  Then for a valid binding contract, the seller needs to sign off on everything before that time limit.

If for some reason the seller sends back the signed contract but it's a few minutes past the time limit, then you don't have a binding contract.  The buyer has to change that time limit of offer, initial, and send it back to the seller for their initials at the changed time limit of offer.  You don't have a binding agreement until the seller sends it back again.  This means that there's a chance that another offer can come in and mess things up for you.

So be careful. Trying to quickly bind down a home by putting in a really short time limit of offer can sometimes backfire.


Page 2, B. 1. Warranty


The title search is done by the closing attorney.  They usually wait until after the due diligence period is over because it costs them money to hire someone to do the title search.

Title issues are fairly rare but once in a while there are issues with paid off mortgages that haven't been recorded as satisfied or other technical problems.

The title search finds any liens attached to the home.  Sometimes an HOA might have a lien for unpaid dues.  Any of these items have to be taken care of by the seller before title can be transferred.


Page 2, 3. Method of Payment


Just about every closing attorney requires the funds to be wired to their escrow account before closing. Cashiers checks aren't used anymore due to problems that have occurred in the past with fraud.

If you wire too little, usually a personal check for amounts less than $500 will be accepted.

If you wire too much money, the closing attorney cuts you a check for the overage at closing.

Wires aren't immediate.  They sometimes can take several hours to go through so you need to plan accordingly.


Page 2, 4.  Closing Costs and Prorations




Unused Seller's Monetary Contributions remain with the seller so make sure you don't ask for more closing costs than you'll be able to use.

Many times the property tax prorations have to be based on last year's tax bill because the tax bill for the current year isn't available at the time of closing.   All parties agree that if the actual tax bill is different, both parties will correct the prorations accordingly. 

Remember that taxes are paid for the entire calendar year sometime in October.  So if you close in August, the seller will pay you the property taxes for January thru August and then you will pay the entire tax bill for the year in October.  If you have a mortgage that escrows for taxes and insurance, you will be required to pre-fund that escrow account so that there will be enough to pay the taxes come October.

Again, there aren't separate checks for these specific items.  It's all balanced out on the closing sheet with credits and debits.

Page 2. 5.a. Right to Extend Closing Date


If your lender can't get the loan closed in time you can unilaterally extend the closing date by up to 8 days.  But the delay can't have been due to something that the Buyer did or didn't do.

If the seller needs more time to clear something on the title, they also can unilaterally extend the closing date.

Since all parties are making their respective plans based on the contracted closing date, you want to do everything possible to get it closed on the agreed upon date.  Use this clause only as a last resort.

Both parties can also agree at any time to an amendment to extend the closing.


Page 2. 5.b. Keys and Openers


Page 2. 7. Closing Attorney


When a mortgage is involved, the closing attorney represents the lender.  The lender will send over "The Package" to the closing attorney at least 4 days before closing.  From these instructions, the lender prepares all of the paperwork that the lender requires to be signed.

Page 3. 8. Earnest Money


This details the process of what happens if there is a dispute with how the earnest money should be disbursed.


Usually if there is a dispute, the broker will eventually send it to arbitration. The loser pays costs.

I advise not having the earnest money so large that it makes an attractive target to a litigious party.


Page 3. 9.a. Right to Inspect Property


You have the right to inspect at "reasonable" times.

Try to have consideration for the seller by trying get everything done on one day if possible.  If you need to take measurements or have painters or contractors look at it, schedule them at the same time.

Usually you set up an inspection time that works for your schedule and then I will let the listing agent know. 


Page 3. 9.c. Warranties Transfer


All warranties transfer but if there is a cost involved in transferring a warranty, the Buyer is responsible for it.


Page 3. 9.d and e. Due Diligence and  Repairs


You have until the end of the Due Diligence Period to either negotiate an amendment to address concerns or to terminate.

If you don't terminate, the contract continues.

All repairs agreed to shall be made in a good and workmanlike manner before closing.

You can have your inspector check out the repairs before closing. 

Since the way things get done can be very subjective, it's best to either be very specific on how the repairs shall be completed or better yet, try to get a monetary concession so you can control exactly how the work will get done by doing the repairs yourself after closing.


Page 4. 11. b. Brokerage Commission in case of Default


This is very important to understand.  This clause gives the agents the right to sue a defaulting party for the commission that they would have received had the contract closed. Most of the time agents will not pursue a defaulting party for the commission  but you need to know that this is possible.

As a buyer, if you back out of the contract at the last minute outside of any other specific contingency, you not only lose your earnest money but your are liable to pay the whole commission.  On a $500,000 home with a 6% commission that would be $30,000.


Page 4. 11.c. Disclaimer


Agents might talk to you about a lot of things but this just let's you know that they are not an expert in many of  these fields and you should seek expert advise regarding things like termites or construction or taxes etc.


Page 5. 2. Default


You might ask, what if the seller decides not to sell?  This says that you can sue them or take any  other lawful remedy.


Page 5. 3. Condition at Closing


The home should be in substantially the same condition as on Binding Agreement Date and it should be clean and free of trash and debris.

You might think it wise to put in a special stipulation about having it professionally cleaned or maybe having the carpets cleaned but then you get into issues of just how clean is clean?  There is clean and then there is clean.  Do you really want to set yourself up for disappointment?  I advise that you just plan on having it cleaned to your specifications before you move in.


Page 6. 5. Exhibits and Addenda


Anything can be attached to the contract.  This is just a list that reminds you of the most often used exhibits.

The one that is usually the most important is the "Conventional Loan Exhibit" Click to download a copy.


Page 6. Special Stipulations


This is where you can add any special stipulations such as asking for the seller to provide a termite bond.

If there is a conflict in terms, the Special Stipulations control.


Finance Contingency and Appraisal Contingency are in the

Conventional Loan Exhibit


You agree to apply for a loan within a certain number of days, usually around 3 days.  You just have to apply, not be approved in that initial time frame.



You need to specify the type and terms of the loan and the specific lenders that you are making the financing contingent on.  You can get any other type of loan or use any other lender but you can only terminate the contract if you get denied for the loan you specify here and it has to be by a lender that you have listed.


The length of the finance contingency is negotiable.  28 days is a common length of time.  You don't need to have the loan completely approved but if you have any doubts of being approved, you really ought to get the lender to make sure they have final loan commitment by this day.


The appraisal contingency is part of the Finance Contingency.  Usually you make it the same time or maybe a little shorter than the finance contingency part.

This clause also spells out the details of what happens if the appraisal comes in low.  If that happens, you can try to negotiate the price down.  If the seller doesn't agree to that, you can either terminate or continue on to closing at the agreed upon price.  The lender will only loan money based on the appraised price so if the appraisal is low than the purchase price, you will have to come up with a larger down payment. 

Most buyers wouldn't consider paying more than the appraised price but sometimes appraisers can be way off target.  Appraisers aren't perfect.  Many times they don't know a specific area and won't make adjustments for highly sought after school districts. 




Frequently Asked Questions


Do I have to use the GAR(Georgia Association of Realtors) Contract?
No, you can submit an offer on a table napkin if you'd like.  But an offer on anything other than the standard GAR contract will raise a red flag.  Agents invest a lot of time and training learning about the contract and if you make an offer on something else, it will just make them and the seller suspect about what's going on.


Do new home builders use this contract?
Usually builders have their own "standard" contract that is slanted to their favor.  Usually you agree to their terms or you move on.


Can I change any terms or remove any clauses?
Yes, everything is negotiable but you want to be careful about what signals you are sending to the seller.  If you load it up with all kinds of special stipulations the seller might anticipate more demands through the process and instead go with an offer that seems to be more cooperative.


Can you send me blank forms that I can fill in myself?
No. You need to be a licensed agent to be able to use these forms.  That's why I have the watermarks on these samples.



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This offer has nothing to do with any other agent at Atlanta Communities other than Tim Maitski.
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All information about homes from the Atlanta MLS home search engine is input by thousands of individual real estate agents throughout Atlanta and is made available through a service called ListingBook. We provide access to this data for the convenience of our clients.  We have no control over this database.  All information on this web site is copyrighted and intellectual property of It is deemed to be current and accurate, but is not warranted. 2002. Tim is a licensed Realtor with Atlanta Communities Real Estate Brokerage.

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