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FAQ: General Question About the Purchase and Sale Agreement aka The Contract - 2006-05-28
Last week we talked about the essential elements of a residential sales contract, and decided to examine the four most important parts of that agreement, as far as the consumer is concerned. Before we get started, here are some commonly asked questions about real estate agreements in general:

Q: Why do you recommend the contract form from the Georgia Association of Realtors (GAR)?

A: Even though I am not a Realtor, I do recommend the Realtor contract form for two reasons.

First, it is well written and clear in its language. The GAR Forms committee has worked for years to produce a balanced framework for a residential sales transaction that is understandable to almost anyone who takes the time to read it. In my opinion, it is biased toward neither seller nor buyer, but instead provides a good skeleton for the parties to use when structuring their sale.

Second, because most brokers in Georgia are members of the GAR, and because most of them require their agents to use this particular form, it has become the defacto real estate sales form used in most transactions in this state.

Q: Can I use another form or can I hire an attorney to help me draft another document?

A: Yes, you are free to use any form you choose when making an offer to purchase real estate, but the reality is that your offer will be judged by the other party against the GAR form, simply because most agents and attorneys are so familiar with it.

I have made many offers on many houses over the years, and I have come to the conclusion that my interests are best served when the seller clearly understands what I am offering. In today's environment, sellers and their agents and attorneys are overwhelmingly most familiar with the GAR documents, and prefer to use them as the basis for any written agreement.

Q: How can I make major changes in the language or in the structure of the document if I want to do so?

A: The GAR contract form is easily modified. If you wish, you can simply strike through any portion of the written agreement you want to remove. Once you initial, date and time the stricken text, it is no longer a part of the agreement.

Likewise, you can add terms and conditions of the sale by listing them under "special stipulations" at the end of the contract form. If you need more room, you can add additional pages to the special stipulations.

Q: If one of my special stipulations were to conflict with a written part of the contract, what would happen?

A: The special stipulations section of the contract is marked with language directing that any stipulation which conflicts with the body of the contract shall control, so the stipulation would prevail. Even so, it is better to specify that the contradicted item is not a part of the agreement.

Q: Are real estate agents allowed to write sales contracts?

A: Most real estate professionals receive extensive training on how to assist buyers and sellers as they make and respond to offers to buy real estate. And because they deal with these forms on a daily basis, they are knowledgeable on how these agreements are formulated, and can usually help you put together a valid form document.

That being said, it is important to remember that a real estate agent is not licensed to practice law, which means they can not give you legal advice and they can not interpret contracts nor draft legal agreements. Instead, they are allowed to fill in blanks on forms already drafted by real estate attorneys for this exact purpose.

This is another reason why I like the GAR forms set. In addition to the basic "purchase and sale" agreement, there are literally dozens of available special stipulations covering a wide array of potential needs. Your agent is trained to know what form to use in what typical situation, and can quickly address your specific needs by utilizing the proper form.

Unless you are entering into an unusual or particularly complex transaction, an experienced real estate professional will likely be able to assist you in putting together a well-written and clear offer which covers all the needed information for a smooth purchase.

Q: So you don't think it's important to have an attorney?

A: I think it is very important to consult an attorney, but it is usually not necessary to ask your attorney to draft the agreement in the first place.

Instead, I recommend that you work with your agent to draw up your offer, addressing all the various issues as they come up in the standard forms. Then I believe it is smart to consult your attorney before you make the offer to the other party. In that way, you get the benefit of the agent's experience and your attorney's in-depth knowledge of the law.

Q: If I need to move quickly and my attorney is not available, won't that procedure slow down my offer and maybe cause me to lose the sale?

A: If speed is an issue, you can make the offer and add a contingency that says the offer is subject to your attorney's approval within a certain number of hours. That way, if your offer needs to go in on a Saturday, you could have it reviewed Monday morning.

Q: So, is it important to have an attorney review every offer I make?

A: This may very well be the largest purchase you ever make in your life, and I just think it's smart to have a lawyer look things over before you commit yourself for the next thirty years.

 
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