3.1 Georgia Purchase and Sale Agreements

Validity Requirements and the GAR Form

The Georgia salesperson exam tests the Georgia Association of REALTORS (GAR) Purchase and Sale Agreement, the form used in the large majority of residential deals. RE Forms (the Georgia MLS form package) and attorney contracts also appear, but the GAR timelines are the ones memorized for the exam.

A Georgia real estate contract must satisfy the universal elements of any valid contract plus the Statute of Frauds, which (under O.C.G.A. § 13-5-30) requires any contract for the sale of land to be in writing and signed to be enforceable.

When a Georgia Contract Becomes Binding

A frequent exam trap: an accepted offer is not binding until the acceptance is communicated and delivered back to the other party within the offer's time limit. The binding agreement date triggers nearly every other deadline in the GAR contract.

1. The offeree signs the offer (or a counteroffer) without changing terms.
2. That signed acceptance is delivered to the offeror or their broker.
3. Delivery happens within the Time Limit of Offer stated on the form (commonly stated as a date and clock time).

Trap: If the seller signs but the signed copy is never delivered back before the offer expires, there is NO binding agreement. A late or modified "acceptance" is legally a counteroffer that the original offeror may accept or reject.

Earnest Money Timing — the 3-Day vs. 5-Day Conflict

The GAR form states earnest money is due within a number of banking days after the binding agreement date (often 5 banking days on the form). But GREC Rule 520-1-.08 requires a licensee acting as holder to deposit trust funds within 3 banking days of receipt. Because the regulation is stricter and binds the licensee, follow 3 banking days on the exam unless the question explicitly asks what the GAR form text says.

• Worked example: Binding agreement is a Tuesday and the holder receives the check that day. Banking days are Wed, Thu, Fri. The check must be deposited by Friday (Saturday/Sunday and federal holidays do not count).
• Earnest money amount is fully negotiable; a low or even $0 earnest money does not invalidate the contract.
• The holder is named in the contract (listing broker, selling broker, or closing attorney).

Contingencies and Special Stipulations

The power of the GAR contract is in its contingencies — defined conditions that let a buyer terminate or renegotiate without forfeiting earnest money.

Due Diligence Period

The GAR Due Diligence Period is a negotiated number of days after binding during which the buyer may, for any reason or no reason, terminate and recover the full earnest money. The buyer inspects, reviews HOA covenants, checks zoning and permits, and orders a survey. Repairs are requested via an Amendment to Address Concerns with Property; the seller is not obligated to agree.

Financing and Appraisal Contingencies

The buyer must apply for financing within the days stated and pursue approval in good faith; a buyer who never applies cannot claim the financing contingency.

Time Is of the Essence

Georgia GAR contracts state that time is of the essence, so every deadline is strictly enforced. A buyer who tries to terminate one day after the due diligence period ends has lost that right — late notice is ineffective.

Amendments, Counteroffers, and the Mailbox Question

Exam note on the 'mailbox rule': General contract law says acceptance can be effective on dispatch. But the GAR Purchase and Sale Agreement overrides this by requiring delivery of the signed acceptance; the contract's own terms control. Watch for questions that contrast common-law dispatch with the GAR delivery requirement.

Scenario: A buyer offers Monday with a Tuesday-noon time limit. The seller writes a higher price and signs Tuesday morning. This is a counteroffer, not acceptance — no binding agreement exists, and the original buyer is free to walk or accept the new price.