Whats the difference between the Georgia Non exclusive buyer brokerage agreement and the Georgia exclusive brokerage agreement?

A person who is planning on buying a home will usually sign a broker agreement with their real estate agent prior to writing up a purchase agreement. These agreements are designed to explain who is representing the buyer and what the details of this agreement are. There are a number of different buyer-broker agreements that are used throughout the U.S. Some are used more frequently than others. Let’s take a look at some of the most common agreements.

Non-Exclusive, Not for Compensation

This buyer-broker agreement is used to outline the real estate agent’s responsibilities to the buyer that they are representing. Other details will include the agency relationships, the scope of duties for the broker, and the obligations that are placed on the buyer in this agreement. Compensation is not part of this agreement. The buyer retains the right to hire another broker to help them find a new property. The buyer reserves the right to request that a single agency is their only form of representation.

Non-Exclusive, Right to Represent

This is a non-exclusive agreement that is drawn up to describe what the obligations are for the broker on behalf of the buyer. This includes information about relationships within the real estate agency and the scope of the responsibilities for each party. There is no responsibility in place for compensation. A commission will not be needed if the broker is being paid by the seller of a specific property. Buyers often think that they will need to pay a fee when they are in contact with a real estate agent who is representing a property. This is not necessarily the case. A buyer also reserves the right to buy a property from another real estate agent as long as the home is not being sold on behalf of the original agent. The buyer also has the right to request a single agency is involved.

Exclusive, Right to Represent

This agreement is very similar to the non-exclusive option when it comes to major details. The big difference between these two agreements is that the buyer is required to work exclusively with their real estate agent in this type of agreement. The buyer is not allowed to hire more than one broker but they can request single agency from the company that they are choosing to deal with. The commission is negotiable with the agent. If the seller of a home is paying commission to an agent then the buyer is not responsible for these costs.

The Importance of a Buyer-Broker Agreement

These agreements are incredibly important. When first signing up with an agent it might not seem like a big deal to consider all of the specific details that are part of a buyer-broker agreement. However, it is important to think about the future and what might occur down the line. This agreement is designed to protect the buyer and the real estate agent. Without one of these agreements there is a lot of room for error. It’s always best to outline the agreement ahead of time so that everybody knows what is expected of them. These guidelines can be followed throughout the entire process and nobody will fall short in the end when a deal is finally made.

Need more information about buyer-broker agreements, or looking at new homes in San Marcos? Contact The Damron Group REALTORS, a real estate agency in San Marcos, TX, to speak to a professional real estate agent.

When a person starts the home buying journey it’s often an emotional experience. They imagine themselves living in the ideal space where they can be completely relaxed. They envision how their life will improve and the things they will do to add their personal touch. They think about how they’ll celebrate milestones with loved ones. 

All the paperwork that’s involved is the last thing on their minds.

In Georgia, like all other states, a contract is needed to enter into a contractual agreement to buy or sell a property. The Georgia statute of Frauds requires that certain key details of a real estate sale be in writing to be considered “definite and complete”. These details include: 

• Name of the seller

• Name of the buyer

• The agreement to purchase/sell

• A legal description of the property

• Agreed upon purchase price

• Terms of payment

• Conditional clauses

• Brokerage fees/compensation

• Closing date

• Signatures

Technically, there are dozens of Georgia real estate contracts and forms. However, only a fraction will apply to any given sale. 

Whether you’re on the selling side or buying side, it’s in your best interest to understand how Georgia real estate law affects contractual agreements and the types of legal contracts that are used for a purchase. It’s something that needs to be understood upfront because the first legal contract actually needs to be signed before an offer is submitted. 

Seller Listing Agreement

Unless a home is for sale by owner (FSBO), the first legally binding contract will be a seller listing agreement. Georgia real estate agents use two types of agreements: an Exclusive Seller Listing Agreement and a Non-Exclusive Seller Listing Agreement.

A seller listing agreement is basically a contract of employment. It establishes that the seller (homeowner) is hiring the brokerage to list their home for sale in exchange for a commission or a fee. 

With an Exclusive Seller Listing Agreement, the seller/homeowner is giving just one broker the ability to list their property, and they cannot enter into a listing agreement with another broker during the period of the agreement. A Non-Exclusive Seller Listing Agreement enables a seller to use more than one broker and whichever broker produces a buyer gets the commission.

Georgia law requires that all seller listing agreements be in writing. If an Exclusive Seller Listing Agreement is used there must also be a termination date.

Other points on the Seller Listing Agreement include:

• Statement of the listing agreement

• Property identification

• The legal description of the property

• List price

• Negotiation approval

• MLS marketing

• Commission

• Listing period

• Protected period

• Types of agency relationships offered by the broker

• Special circumstances for listing the property (divorce, bankruptcy, etc.)

• Seller default declaration

• Seller’s property disclosure statement requirement

• Limits on broker’s authority, responsibility and liability

• Seller’s signature for acceptance

There are also a number of miscellaneous items and explanations for the points above. Additional brochures or exhibits may also be attached to the agreement. 

The Seller Listing Agreement is important beyond establishing who gets the commission because it also establishes the relationship between the brokerage/agent and seller. Georgia’s Brokerage Relationships in Real Estate Transactions Act (BRRETA) requires that agents “disclose their agency and non-agency relationships to the parties to the real estate contract.” Georgia Real Estate Commission (GREC) rules also dictate that agents must disclose in writing who is paying their commission, which is clear-cut when you have a Seller Listing Agreement.

Buyer Broker Agreement

On the other side of the deal, there is the buyer broker. They too want to ensure that their hard work is rewarded by entering into a contractual agreement with their client that’s searching for a new home. Again, there are exclusive and non-exclusive buyer broker agreements. 

Like the seller side, an Exclusive Buyer Broker Agreement means that the buyer agrees to work with only one agent to purchase a home. The buyer can’t enlist the help of another agent until the exclusive agreement expires or is terminated. Therefore, the agreement must include an expiration date. 

The Non-Exclusive Buyer Broker Agreement allows a buyer to establish a relationship with more than one brokerage/agent simultaneously. Most buyer agents only use the Exclusive Buyer Broker Agreement because without it there’s a lot less certainty their work will result in a commission. 

Items that are on the Buyer Broker Agreement include:

• Statement of brokerage agreement

• Independent contractor relationship

• Broker’s duties to the buyer

• Buyer’s duties

• Retainer fees

• Limits on broker’s authority and responsibility 

• Commission fees

• Extension period

• Disclosures

• Broker’s policy on agency

• Dual agency disclosure

• Notices

• Special stipulations

• Buyer’s signature for acceptance

Either of the agreements will establish representation, which is important. Georgia Law, code section 10-6A-1A states that a broker cannot legally represent a buyer and draw up an offer without having one of the two agreements in place. Having representation is beneficial for buyers because they will have an agent that is bound by law to look out for their best interest, and it won’t cost a dime because the seller pays the commission. Another benefit for buyers is that entering into either agreement eliminates the possibility of dual agency. 

Georgia Residential Purchase and Sale Agreement

This is by far the most important legal contract when you’re buying a single-family home. The Georgia Residential Purchase and Sale Agreement covers everything that is required for a contract to be considered complete and enforceable.

The GREC has an official Residential Purchase and Sale Agreement that’s available to licensed agents to submit an offer and execute a contract, but it’s not required to be used. As long as a written agreement covers all the necessary points it’s a complete contract regardless of whether or not it comes from the Commission.

The GREC updates its Residential Purchase and Sale Agreement regularly, but here’s a rundown of what the contract contains:

• Key Terms and Conditions

  • Purchase and sale agreement 

  • Property identification

  • Legal description

  • Whether there’s an existing survey

  • Purchase price

  • Seller contribution to closing costs

  • Closing date

  • Holder of earnest money

  • Earnest money amount, method of payment and date for submitting

  • Due diligence period

  • Option payment details

  • Lead-based paint disclaimer

  • Brokerage relationships in the transaction

  • Time limit for the offer

• Other Terms and Conditions

  • Notices

  • Default specifications

  • Risk of damage to property disclaimer

  • Exhibits and addenda

  • Special stipulations

• Acceptance and Contact Information

  • Buyer contact information

  • Seller contact information

  • Buyer signature

  • Seller signature

  • Selling broker/licensee contact information

  • Listing broker/licensee contact information

  • Binding agreement date

There are variations of this legal contract for different types of property. For example, if you were purchasing a brand new home you would use the New Construction Purchase and Sale Agreement.

*Note About Offer to Purchase

An offer to purchase in Georgia is not necessarily a legally binding contract. It’s just the first step towards a binding contract. It’s considered a conditional promise, not a legal contract.

The offer must be accepted for it to become a binding agreement. Should the seller not accept the offer, counter the offer or the buyer revoke the offer it would be off the table and there would be no sale. Usually, the seller will use the Counteroffer to or Modification of the Unaccepted Original Offer form to amend the offer, and if the buyer accepts the changes then it’s considered an agreement.

Amendment to Agreement

It’s not uncommon for the details of a real estate deal to change slightly after the original agreement is signed. There could be an issue that’s discovered during the inspection or the date may need to change because the lender needs a few more days. 

When a change needs to be made an Amendment to Agreement form is used. It spells out what is changing and both parties must sign and date the agreement for the change to legally become part of the sale.

Georgia has a generic Amendment to Agreement contract but there are also nine specific amendments for common changes. For example, if the appraisal came back $5,000 under the offer price and the seller agreed to drop it so financing can go through an Amendment to Sales Price contract could be used. 

Less Common Real Estate Contracts in Georgia

The contracts above are some of the regular paperwork that almost always accompanies a home sale. However, that’s far from all the contracts that could be involved. Below are some legal contracts you may come across but are not commonly part of a real estate purchase:

Temporary Occupancy Agreement for Seller After Closing Exhibit

Temporary Occupancy Agreement for Buyer Before Closing Exhibit

Option Agreement

Personal Property Agreement

Arbitration/Mediation Agreement

Sale or Lease of Buyer’s Property Contingency Exhibit

Special Stipulations

Buying a home in Georgia is a lot like buying a home in other states - there’s a lot of paperwork between the offer and closing. Those contracts might seem like overkill at times, but they’re what ultimately make a home sale possible and they ensure everyone involved is legally covered. Ready to start your Georgia real estate career?

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