GA Real Estate Contracts: 2011 GAR Form Changes

Courtesy of MaryAnn McReynolds of Prudential Georgia Realty

Georgia REALTORS® are using new contacts and forms which were changed significantly for calendar year 2011. Few changes were made to the actual Purchase and Sale Agreement, but several new forms were created to make the practice of real estate easier for brokers and agents. Some highlights by form are found below.

1. F4, Exclusive Buyer Brokerage Agreement

This GAR form was rewritten to make buyers (who don’t expect to pay a commission) more comfortable with signing an Exclusive Buyer Brokerage Engagement Agreement (which clearly obligates them to do so in certain circumstances). The previous Agreement simply provided that the buyer paid the commission whenever the seller did not. The new approach is: a) define what commission the broker expects to be paid in the transaction; and b) provide that the seller pays the commission except in certain limited circumstances. They include a) when the buyer leases instead of buying and thus owes a leasing commission; b)when the buyer purchases a FSBO and seller does not agree to pay commission; and c) when seller defaults. In most cases only the default section will apply to most buyers.

2. F20, Purchase and Sale Agreement

a. Time Limit of the Offer Section

This section clarifies that an offer expires unless prior to time of expiration it is accepted by the person receiving the offer and delivered back to the party making the offer. Most agents assumed in the past that it had to be returned before the time limit expired, but this change now makes that clear. Fax is an acceptable method and is deemed to be delivered when sent.

b. Paragraph 17, Default

This paragraph was rewritten so in the event a broker has a broker engagement agreement with a buyer or seller the rights of the broker in the event of a default against the broker’s client are limited to those set forth in the brokerage engagement agreement rather than the purchase and sale agreement,

c. Paragraph 15, Lead Based Paint

This paragraph was modified so that if repairs are being made to a home built prior to 1978, they should be performed in accordance with EPA’s “Renovate Right” brochure. These new rules are designed to prevent lead-based paint fumes and chips from causing injury to the renovator or others.

d. Signature Block

Listing and selling brokers can now identify the Board of REALTORS®, if any, in which they are a member. Since non-REALTORS® are not required to arbitrate commission disputes with REALTORS® (unless they are required by virtue of belonging to a MLS) it  is important to know whether or not the broker you are working with is a REALTOR®.

3. F94, New Short Sale Contingency Exhibit

The Short Sale Contingency Exhibit has several important modifications. Bold face language has been added that “If the mortgage lenders and, if applicable, other lien holders, agree to take a reduced payoff, it shall be the sole responsibility of seller to verify that they are also releasing seller from further liability”. This change was made to protect REALTORS® against claims that it was the REALTOR’S® job to secure such a release.

The above are just some highlights of the recent changes, a competent REALTOR® can explain in detail other important modifications such as those made to the Seller’s Disclosure Exhibit.

For more information contact:

MaryAnn McReynolds, REALTOR®

Prudential Georgia Realty

770-891-3314

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