Anyone buying or selling real estate in Georgia should be aware of the requirements of the state’s real estate laws. While most concepts and issues relating to real estate contracts are the same as those in any other parts of the US, there are differences. Learn more below from our Peachtree City Real Estate Attorney.
In all instances, real estate sales contracts include offers to purchase and an acceptance that might incorporate a counter offer. The contract will be null and void if the seller rejects it or if the buyer revokes the offer before it has been accepted, or the time limit expires prior to acceptance.
Additionally, all real estate contracts require two competent parties to agree on the contract, which two vital elements: the offer, and acceptance of the offer.
Once the offer has been made there are several requirements that must be fulfilled:
- An exchange of promises by buyer and seller – known as. Essentially this is an agreement of how much will be paid for the property, and what is included in the assets.
- Proof that both buyer and seller are competent parties. Legally “incompetent” persons (or parties) include those who were mentally incapacitated by drugs or alcohol when the agreement was signed; and those with a mental or medical condition that deems them legally incompetent. Even someone of advanced age might be considered legally incompetent by a court of law. This is because it is vital both parties understand the agreement and its consequences.
- Both parties must consent to the agreement which is only considered to be valid if it does not contain mistakes, misrepresentations, and fraud, and no undue influence or duress has been identified. This is known legally as “reality of consent.”
- If any contract contains anything illegal or unlawful, it will be considered void. This is known legally as “legality of purpose.”
- The contract must be put in writing. Even though a verbal contract may be legally binding, all states in the US have a Statute of Frauds that requires certain contracts to be in a written form. The Statute of Frauds in Georgia governs all contracts involving the sale and lease of “real property.” While not every single part of the agreement has to be written, the Georgia Statute requires at very least:
- Names of buyer and seller
- The agreement
- “Sufficient” description of the land/property
- Contract price agreed to
- Terms of sale, unless cash is being paid
- Closing date
- Any conditional clauses
- Any stipulations that relate to the broker and brokerage fees or compensation
- Signatures of both parties
Finally, the contract is discharged according to the terms of the contract. Alternatively, if one or both parties fail to do what is required in terms of the contract, the contract may be cancelled due to non-performance. Failure to perform might also be considered a breach of contract, in which case there are certain legal actions and remedies that might follow.
Real Estate Contracts and Georgia Law
While both parties are sometimes present when an agreement is signed, more usually the buyer submits an offer to purchase via a real estate agent that is submitted to the seller for consideration. In this case, the seller is usually given a specified time to accept the offer to purchase. If not he or she has “a reasonable” amount of time to accept or reject it – or makes a counter-offer.
Counter-offers in Georgia Law
In Georgia law there are two important issues that relate to counter-offers:
- It may be accepted verbally unless there is a clause that states written acceptance must be made. However, if made verbally, the counter-offer cannot be enforced in court.
- Counter-offers that for part of the negotiation process do not need any separate type of consideration.
Legal Description in Georgia Law
Georgia law specifies options for the legal description of real property in the consideration. For example, the words County, District, and Land Lot are used together with metes and bounds, or the lot and block, also known as “the plat map description.” Portions of land in the state of Georgia are also known as sections and headrights, as well as Georgia Militia Districts, all of which date back to the original survey of Georgia in the 1800s.
Since Georgia is one of the 13 original colonies in the USA, the government survey system relating to legal description isn’t used.
Terms of Payment in Georgia Law
The courts in Georgia demand a complete, definite statement of terms of payment. This may be:
- Cash without a loan
- Cash plus a loan from either a bank or third party
- Deferred payment involving a seller-financed purchase money mortgage
- Loan assumption that allows the buyer to take the property subject to an existing loan (if this allowed in the security deed)
- In the form of other real or personal property
Ultimately, if you are buying or selling real estate in Georgia, you should be working with a trusted real estate attorney that understands the real estate industry.
Slepian, Schwartz & Landgaard is a Peachtree City firm of attorneys that has considerable experience in real estate. We understand how Georgia Law works and how it affects real estate contracts. Contact us today to ensure that your sale or purchase runs smoothly.