Closing on a home or land in Georgia follows a set of rules that differ from most other states. Georgia real estate closing laws require a licensed Georgia attorney to conduct the closing, set specific witnessing standards for deeds, impose two separate closing-related taxes, and apply a race-notice recording system that rewards buyers who record promptly. Federal disclosure and withholding rules sit on top of all of that. Knowing what each requirement does, and who pays for it, keeps the closing table from becoming a place of surprises.
Only a Licensed Attorney Can Close
Georgia treats a real estate closing as the practice of law. Only an attorney licensed by the State Bar of Georgia can conduct one. The Georgia Supreme Court settled the point in In re UPL Advisory Opinion 2003-2, holding that preparing or facilitating the execution of a deed is something only a licensed Georgia attorney may do.1Justia. In re UPL Advisory Opinion 2003-2 That rule has been in force since 2003.
The closing attorney examines the title, prepares or reviews the deed, checks the loan documents, and resolves any legal issues that surface. Unlike a title company, which focuses on issuing insurance policies, the closing attorney owes a fiduciary duty to the client. Most closing attorneys also act as escrow agents, holding buyer funds and lender proceeds in trust until every condition of the sale is satisfied.
How Deeds Must Be Signed and Witnessed
Under O.C.G.A. § 44-2-21, a deed transferring real property must be attested by two witnesses.2Justia. Georgia Code 44-2-21 – Recording Instrument Executed Within or Outside State One of those witnesses may be an authorized official such as a notary public, judge, magistrate, or superior court clerk.3Justia. Georgia Code 44-2-15 – Officers Authorized to Attest Instruments The statute says “may,” not “must,” but in practice county clerks expect a notary to serve as one of the two witnesses on any deed submitted for recording.
Security deeds, which are Georgia’s version of a mortgage, must meet the same execution standards, and lenders commonly require notarization on affidavits and related loan instruments. If a document lacks proper attestation, the county clerk can refuse to record it. That delays the transaction and leaves the buyer’s ownership unprotected against third-party claims until the paperwork is fixed and refiled.
Transfer Tax and Intangible Recording Tax
Georgia imposes two closing-related taxes that buyers and sellers should budget for before they arrive at the table.
Real Estate Transfer Tax
Every deed conveying real property in Georgia triggers a transfer tax. The rate is $1.00 for the first $1,000 of consideration, plus $0.10 for each additional $100.4Justia. Georgia Code 48-6-1 – Transfer Tax Rate That works out to roughly $1.00 per $1,000 of the sale price. On a $350,000 home, the transfer tax runs about $350. The seller customarily pays this tax in Georgia, though the purchase agreement can shift it.
Intangible Recording Tax
When a buyer finances the purchase, the security deed securing the new mortgage is subject to an intangible recording tax of $1.50 per $500 of the loan amount, which comes out to $3.00 per $1,000.5Justia. Georgia Code 48-6-61 – Filing Instruments Securing Long-Term Notes On a $300,000 mortgage, that is $900. The tax is capped at $25,000 on any single note. The buyer typically pays, and the tax is due when the security deed is recorded. Cash buyers avoid this tax entirely because no security deed is involved.
Title Search and Title Insurance
Before closing, the closing attorney or a title examiner working under attorney supervision searches public records to confirm the seller actually owns the property free of competing claims. The search covers recorded deeds, court judgments, tax liens, and other encumbrances. Common problems include unpaid property tax liens, contractor liens from prior renovation work, and judgments against the seller.
Defects must be resolved before closing. A seller with an outstanding tax lien will usually have the debt paid from closing proceeds. Unresolved defects can block the sale.
Title insurance protects against problems the search missed. Lenders almost always require a lender’s policy as a condition of financing. Buyers can also purchase a separate owner’s policy. The lender’s policy covers only the loan balance and shrinks as the mortgage is paid down. An owner’s policy covers the full purchase price and lasts as long as you or your heirs own the property. Skipping the owner’s policy means absorbing the full loss if a hidden claim surfaces years later.
Recording the Deed
After closing, the deed and any security deed must be recorded in the superior court clerk’s office in the county where the property sits.6Justia. Georgia Code 44-2-1 – Where and When Deeds Recorded The closing attorney typically handles this step within days of closing.
Georgia follows a race-notice recording system. An earlier unrecorded deed loses priority to a later recorded deed if the later buyer had no knowledge of the earlier transaction.6Justia. Georgia Code 44-2-1 – Where and When Deeds Recorded If you buy a property but do not record your deed, and the seller fraudulently sells it again to a second buyer who records first without knowledge of your purchase, the second buyer can end up with superior rights. Prompt recording is what protects you. Recording fees are set by state law under O.C.G.A. § 15-6-77, so costs are consistent across counties, and your attorney will include them on the settlement statement.
Escrow and Trust Accounts
Under Rule 1.15 of the Georgia Rules of Professional Conduct, closing attorneys must hold client funds in a dedicated trust account, kept separate from the attorney’s personal or business funds.7State Bar of Georgia. Georgia Rules of Professional Conduct Earnest money, closing proceeds, and payoff amounts all flow through this account, and the attorney cannot release funds until every condition of the sale has been met.
If a dispute arises over escrowed funds, such as when a deal falls apart and both parties claim the earnest money, Georgia law allows the attorney to file an interpleader action and let a court decide. Attorneys who mishandle trust funds face suspension or disbarment. Before closing, confirm with your attorney that every figure on the settlement statement matches your expectations, including how liens, prorated property taxes, and other obligations will be paid.
Separately, most lenders require an ongoing escrow account after closing for property taxes and homeowner’s insurance. The lender collects a portion of these costs with each monthly payment and pays them when due.
Federal Rules That Apply at Georgia Closings
Three federal requirements affect most Georgia closings.
Closing Disclosure Timing
For financed transactions, federal TRID rules require the lender to deliver a Closing Disclosure at least three business days before the closing date. Business days for this purpose means every calendar day except Sundays and federal holidays.8Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs The Closing Disclosure itemizes the loan terms, interest rate, monthly payment, closing costs, and prorated property taxes. Certain post-delivery changes, such as a significant change to the annual percentage rate, restart the three-day waiting period. Cash transactions with no lender typically use an ALTA Settlement Statement instead.9American Land Title Association. ALTA Settlement Statements
Lead-Based Paint Disclosure
Federal law requires sellers of any home built before 1978 to disclose known lead-based paint hazards before the buyer is locked into the contract. The seller must provide the EPA’s lead hazard pamphlet, share any available inspection reports, and give the buyer at least 10 days to hire a certified inspector to test.10GovInfo. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property The contract must include a signed Lead Warning Statement. The buyer can waive the inspection in writing, but the seller cannot skip the disclosure.
FIRPTA Withholding on Foreign Sellers
When a foreign person or entity sells U.S. real property, the buyer must withhold 15% of the sale price and remit it to the IRS under the Foreign Investment in Real Property Tax Act.11Office of the Law Revision Counsel. 26 USC 1445 – Withholding of Tax on Dispositions of United States Real Property Interests The rate drops to 10% if the buyer will use the property as a residence and the price is $1,000,000 or less, and no withholding is required if the buyer will use it as a residence and the price is $300,000 or less. A U.S. citizen or resident seller typically signs a FIRPTA affidavit at closing certifying they are not a foreign person, and no withholding applies. If withholding is required and the buyer fails to withhold, the buyer is personally liable for the tax.
Caveat Emptor and Seller Disclosure
Georgia is a buyer-beware state. It has no statute requiring sellers to complete a comprehensive property condition disclosure form. Sellers are still legally obligated to disclose known latent defects, meaning hidden problems a buyer would not discover through a reasonable inspection. Concealing a known foundation crack behind fresh drywall, for instance, exposes the seller to fraud liability.
Georgia law also carves out topics sellers do not have to volunteer. Under O.C.G.A. § 44-1-16, a seller has no duty to disclose that a property was the site of a homicide, suicide, or other death, or that a prior occupant had an infectious disease, though they must answer truthfully if the buyer asks directly.12Justia. Georgia Code 44-1-16 – Failure to Disclose in Real Estate Transaction Because Georgia puts more risk on the buyer than most states do, a thorough home inspection before closing is the buyer’s primary line of defense.