GREC REnews, Vol. 4, Issue 6 (June 2008)

GREC

Georgia Real Estate Commission
GREC RENEWS

Volume 4, Issue 6
2008 Dates to Note
June 16, 2008 Georgia Broker Course August Board of Realtors
June 17, 2008 Trust Account Class August Board of Realtors
July 16, 2008 Georgia Broker Course Atlanta Board of Realtors
July 17, 2008 Trust Account Class Atlanta Board of Realtors
July 24-25, 2008 Georgia Instructor Training (GIT) Georgia Institute of Real Estate
GREC Disciplinary Sanctions

INSIDE THIS ISSUE:

Authority to Bind 1

Signs

2

Focus on Terminology:
"Amortization"
Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605

June 2008
Who can Sign to Bind the Parties
To the Contract?
Depends...
A contract is only enforceable if the parties signing have the authority to enter the agreement. Therefore it is in the licensee's best interest to see that the contract is properly prepared. In the case of the seller, the form of ownership in which the title to the property was granted will determine who, or how many, people or entities have authority to enter into a binding agreement. It is important to know how title is actually stated before constructing an offer. A look at the deed will display how title was granted and then the determination can be made.
The same holds true for the buyer. The name in which the property will be purchased will dictate who can actually enter into a binging agreement.
If the party is a couple that owns property jointly, both individuals must sign the agreement.
If one party is a partnership, there must be proof that one party can bind the partnership. A General Partnership could have several partners requiring all their signatures or one partner. Perhaps a managing partner may present a document giving him/her authority to sign for the partnership. Generally, the General Partner of a Limited Partnership may sign for the Limited Partnership, but satisfactory documentation should be available.
It the grantor is a corporation and depending on the structure of the corporation, an officer with a copy of a corporate resolution should be presented to show he/she has authority to bind the corporation.
A quick visit to the Georgia Secretary of State website http://corp.sos.state.ga.us will provide information on the corporation or if it is even a corporation that exists in Georgia. The Secretary of State website will also list the type entity the corporation is (i.e. profit, non-profit, LLC...) in addition to names and contact information for the officers and agents of the company.
The real estate licensee is not an expert in how title should be granted. The licensee should suggest that the client or customer use the services of an attorney to determine the correct method of taking tile. However, the licensee often prepares the offer and many times an attorney is not consulted until the contract is signed by the parties. Therefore, understanding how the title is currently held or plans to be taken is needed to develop the offer. Typically a real estate agent gets paid by commission and that commission is only paid upon closing of a transaction. If the contract/offer is not prepared properly, there may be no closing and no commission. Another resource to review recorded real estate documents is the Georgia Superior Court Clerks' Cooperative Authority at http://www.gsccca.org . Although. there is a nominal fee to use this service it can prove invaluable considering time spent and access to information used to create a binding agreement that results in a successful transaction f1or the licensee.

Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605
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Signs, Signs, Signs

Volume 4, Issue 6 June 2008

Whether it is an agent's for sale sign, a sign in support of some elected official, or a directional sign, signs must be placed in compliance with the local sign ordinances. These ordinances may be city or county requirements. Specific rules for placing or prohibiting the placement of such signs may include the following:
Prohibiting the placement of signs on public rights-of-way, curbs, trees, utility poles
Restricting the sign area by size, square footage, and height Establishing setback requirements Restricting the sign elevation relative to grade level
Ordinances vary greatly by locality and the duration of the placed sign is a critical component.
Signs in violation of the local ordinance are subject to fines and at a minimum the loss of costly signs. Most sign ordinances can be researched from one website www.municode.com. A little advance research can prevent some unneeded aggravation and expense.

GREAB Note: The Georgia Real Estate Appraisers Board intends to modify
the rules to require safeguards when sending appraisal reports electronically or otherwise. To review the proposed ruling, go to http://www.grec.state.ga.us/PDFS/About/NOI_539-3-02_June2008.pdf . If you choose to express an opinion, do so before July 11, 2008.

Comments or Suggestions
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GREC

Focus on Terminology: "Amortization

The typical "amortization" process allows the borrower to pay a

steady, predictable amount each payment period for the life of the loan.

Although there are various creative forms of amortizing a loan, the traditional

fully amortized loan has a fixed interest rate.

Each payment includes amounts toward principal and interest. Initially

more interest is paid on the declining principal amount. But as the principal

balance declines, less interest is paid and more of the payment is applied

toward principal.

If the payment is less than the actual amount of interest due on the

outstanding principal, there is "negative amortization." This means that the

principal balance due gets larger rather than smaller. Clearly, the borrower

wants a positively amortized loan. Reference Source: Section 42.05, The Georgia Real

Estate Guide

A loan could also be set up based on a full

amortization schedule with steady payments, but still

Principal

have a balloon payment due at some point before full term, such as in a commercial loan that balloons

in 5 or 10 years. It is important to understand the

Interest

concept of full amortization and how it differs from adjustable rate mortgages where the payment does

not stay the same.

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