Although the steps involved in selling a house or condo are similar across the country, Georgia's real estate laws and practices are unique in some respects. Here’s an overview of the basics—from working with a real estate agent to making legally required disclosures.
Working With a Real Estate Agent
Most people selling their home in Georgia work with a licensed real estate broker or agent. A good real estate agent will help prepare and price your house, market it to prospective buyers, review purchase offers, and negotiate with buyers through the closing.
Before signing up with any agent, get references from other home sellers and check customer reviews on sites such as Zillow and Trulia. You can find licensed Georgia real estate agents at the Georgia Real Estate Commission’s site.
Signing a Listing Agreement in Georgia
Once you find a real estate agent you want to work with, you’ll sign a “listing agreement,” giving the agent the right to market and handle the sale of your house. Most agents use standard forms created by their state or local Realtor association, such as Georgia REALTORS.
Listing agreements typically cover the following terms.
- Commission that you (the seller) will pay. This typically ranges from 5-6% of the house sales price, and is split between your real estate agent and the buyer’s agent.
- Type of listing. Most listing agents will want you to sign an exclusive right to sell listing, which obligates you to pay a commission to the agent regardless of who brings in the buyer. Other arrangements are possible, however, such as an open listing, in which you agree to pay a commission to whichever agent brings in a buyer, or an exclusive agency listing, in which you agree that your agent is the only agent authorized to sell your house, but that you will pay a commission only if the agent brings in the buyer (not, for example, if you do).
- Duration of listing. The listing agreement will cover a set amount of time, such as 90 days.
- List price. Your agent will recommend the appropriate selling price. To educate yourself as to whether the agent is recommending an appropriate price, the National Association of Realtors’ website is a good source of information on prices of houses currently on the market, and websites such as Zillow and Trulia provide data on actual sales prices.
- Items included (or not) in the sale. For example, you may plan to leave behind a built-in dishwasher, which is therefore part of the property that the agent is contracted to sell. Or, you might want to exclude a refrigerator that you plan to move to your new home, in which case the agent needs to know and convey that information.
- Duties and obligations of seller and real estate agent. Your agreement will spell out how the real estate agent will list or market your house, what type of insurance you must maintain on the property, and what disclosures you must make.
Making Real Estate Disclosures in Georgia
Although Georgia ascribes to the theory of caveat emptor (buyer beware) in real estate transactions, state courts there have held that sellers must at least disclose any known, material defects in the property that are not visible upon reasonable inspection.
To aid sellers, the Georgia Association of Realtors offers a disclosure form, which asks sellers to fill in details about the property, such as:
- any defects in the electrical and other house systems
- past flooding or drainage problems
- items included in the sale, such as a gas oven or swing set
- boundary encroachments
- environmental concerns, such as radon or past meth lab use
- insurance claims filed on the property, and
- damage caused by dry rot, termites, or squirrels.
In addition, if your house was built before 1978, you must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website, for details.
What Goes Into Georgia Offers, Counteroffers, and Purchase Agreements
A buyer who wants to purchase a particular Georgia home will make the seller a written offer, specifying the price, proposed down payment, and other terms, such as any contingencies (conditions that must be met for the sale to close, such as the buyers being satisfied with the results of a home inspection report or arranging loan financing or selling their current house).
You may reject an offer outright, accept it as, or (as is more typical) respond with a counteroffer. A counteroffer accepts some or most of the offer terms, but suggests changes to others, such as a higher price or a closing date that’s sooner than the buyer proposed.
A legally binding contract is formed when you accept the buyer's most recent signed offer (agreeing to any changes from the original offer) and notify the buyer of its acceptance. The transaction will next go into what’s called “escrow.”
What Is Escrow?
Escrow is the time period between signing the purchase agreement and closing on the house. You will choose an escrow or title agent, a neutral third party, to serve as intermediary and supervise the process. This may include preparing title reports.
The buyer typically has a lot more to do during this time period than the seller. By the close of escrow, the buyer will need to finalize financing, remove all buyers' contingencies, have the house appraised (typically required by mortgage lenders), and get title insurance—usually under set deadlines.
As the seller, you will need to cooperate in arranging scheduled visits from the inspector and appraiser, and get to work on any contingencies you added to the contract.
Issues often come up during escrow that require negotiating, such as who will pay for repair problems identified in an inspection report. The buyer may insist that you pay to remedy a defect or lower the purchase price. If you cannot reach agreement, the buyer may have the right to back out of the deal.
What Happens at the Closing of Your Georgia Home
By the close of escrow, you and the buyer should have fulfilled all the terms of your purchase agreement. At the closing itself (sometimes a meeting of the parties, other times conducted in separate locations and even on separate days), all final documents and funds will be exchanged between buyer and seller.
The buyer pays you the purchase price, and you give the buyer a deed and other transfer documents and clear title to the property. You pay off any outstanding loans on the property and pay commissions to the real estate agents (per your listing agreement).
Sellers do not usually need to be present at a Georgia closing. Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. The escrow agent will record the new deed in the buyer's name at a local government office, and the home is officially theirs.
Working With a Lawyer
Unlike many states, Georgia requires sellers to involve a lawyer in the house-selling transaction. See Georgia Code Annotated Section 15-19-50, which in part defines the practice of law as covering “conveyancing,” and the “preparation of legal instruments of all kinds whereby a legal right is secured,” and the “rendering of opinions as to the validity or invalidity of titles to real or personal property.”
Your real estate agent can advise you on how and when a lawyer will be involved in the transaction.