Now here is the short note I promised on a third party making an offer after the contract is signed, but before the property is sold. But first, this raises yet another issue: what do you mean after the contract is signed but before the property is sold? Don’t you sign the contract and then take possession of the property right away? As you may have guessed, the answer to that question is no (well, typically not). What typically happens is this: the parties sign the contract, then there is time, usually 30-60 days, maybe longer, for the buyer to complete inspections, for a title search to be performed, for the buyer to complete the mortgage process, for the title company to complete the title search, and for the seller to move out. The period between the time that the buyer and seller sign the contract but before the property is actually transferred is the time that the parties are said to be “in contract.”
In any event, while the parties are in contract, the property can still be shown by the real estate broker and the real estate agent, and there may be back up offers made in case the deal between the original buyer and the seller falls through.
One quick note on what happens when the buyer backs out, or when the seller refuses to close. The most important thing to remember from this whole discussion is that we start out with what the contract of sale says; the language of the contract is super important. Typically, when the buyer backs out, the deposit is forfeited. When the seller backs out, or tries to back out, and the buyer wants to move forward with the deal and get the property, New York courts enforce the contracts in what is called “specific performance,” meaning they generally would force a seller to sell. There are always exceptions, so keep that in mind.
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