When I was a new agent with Barton & Ludwig in Atlanta many years ago, I was taught how to approach the subject with potential buyers. For starters, we were told never to say "sign the contract," but to instead ask the buyer to "initial the purchase agreement."

Indeed, to this day, the form used by most real estate professionals in Georgia is called a "purchase and sale agreement," and the word "contract" does not appear anywhere that I could find in the entire 7 page document.

That brings up another issue, and that has to do with the complexity of the agreement itself. When I started as an agent in 1977, the entire sales contract was on the front and back of a single sheet of paper. Today, the form promulgated by the Georgia Association of Realtors (the GAR) is more comprehensive, taking a full seven pages, one side only.

In its defense, it takes into account things unheard of in previous years, such as mold and toxic waste, and has expanded dramatically in areas such as the right to an inspection and the area of broker responsibilities.

Even so, the written agreement most commonly used between buyer and seller in Georgia has become so complex and lengthy that the average person being asked to sign on the bottom line has little idea of what they are actually signing.

At its most basic, a real estate contract requires only three elements: offer, acceptance, and consideration.

The offer is an expression of willingness to contract on certain terms, and in the case of real estate, it would typically be an offer of a certain sum of money in exchange for ownership of the property described in the offer.

Acceptance is an expression of assent to the terms of the offer, and indicates a desire to be bound to the terms. Signing of the offer is the most common way of communicating acceptance. Prior to acceptance, any offer may be withdrawn by the party making the offer.

It is important to recognize that if you accept any offer, you are accepting it exactly as it is, without any changes. If you make any modification, then the original offer is killed and the terms become an offer from you to the other party, open for their acceptance or rejection.

Finally, consideration is required for the contract between the parties to be enforceable.

Consideration is defined as anything of value given by one party to induce another to enter into a contract. Many people believe that the purpose of earnest money is to fulfill the requirement for consideration, but in fact, the consideration in most real estate contracts may be as simple as the mutual promise of the parties to perform.

The only other basic requirement of a binding real estate contract in Georgia is that the agreement must be in writing. The idea here is that only a written agreement could clearly express the intention of the parties in such an important transaction.

Georgia law does not prescribe a particular form that the written agreement must take, so almost anything in writing would suffice.

And while the majority of successful sales agreements probably utilize the GAR format, one could have a fully binding purchase and sale agreement written on a cocktail napkin and signed by the parties.

Because most real estate sales transactions involve real estate professionals, and because the current GAR form represents the "state of the art" form most widely used in the state, it's a good idea for anyone considering buying a house to become somewhat familiar with its most important features.

It may benefit you to obtain a sample copy of the GAR contract, more formally known as form F20, the "Purchase and Sale Agreement." I recently found several copies floating around in the internet by searching on F20 and the document name.

The forms are available for examination from any agent or broker who is a member of the Georgia Association of Realtors. If any agent refuses to provide a sample copy for you to study before you begin your homebuying process, I suggest you may need another real estate agent.

There are four particularly important parts of the GAR form, and any potential buyer or seller would do well to become familiar with them before beginning their effort. They are:

* The financing contingency. These conditions provide that if, after diligently trying, the purchaser is unable to obtain the necessary loan, then the agreement is cancelled.

Unless otherwise stated, real estate contracts are assumed to be cash transactions. And unless a contingency for financing is in the agreement, the buyer is obligated to purchase whether he gets a loan or not.

* The handling of earnest money. While earnest money is technically not required, most sellers insist on some demonstration of the buyers financial commitment to the purchase process.

Real estate attorneys have told me that there is more disagreement and dispute over payment or return of earnest money than any other single part of the real estate transaction.

* Inspection Contingency & Termite Examination. This language governs the buyers right to inspect the property and to request repairs or withdraw form the agreement based on his findings.

This area of the GAR contract has seen more changes in recent years than anything besides agency, and finally gives buyers and sellers an even playing field, in my opinion.

* The role of Real Estate Agents in the transaction. This section discloses who represents whom, and who pays what commission to whom.

It is critically important for all the participants in the sale to understand who, if anyone, is representing the seller and who, if anyone, is representing the buyer. This section attempts to clarify these issues.

Over the next few weeks, we'll try to gain a better understanding of this written agreement between buyer and seller in the home transaction.