Understanding New York’s Real Estate Contract: What You’re Actually Signing

The purchase contract in a New York real estate transaction is drafted by the seller’s attorney, negotiated between both parties’ attorneys, and signed by both buyer and seller – typically within one to two weeks of offer acceptance. It is a legally binding document that governs every aspect of the transaction. Most buyers and sellers sign it without fully understanding what it contains.

Here is a clear breakdown of the most important provisions in a standard New York residential purchase contract.

The Basic Terms

Purchase price. The agreed sale price, expressed as a dollar figure. This is the number from which everything else flows.

Down payment and mortgage amount. The contract specifies how the purchase price is being paid: how much is cash (the down payment) and how much is financed. This establishes the framework for the mortgage contingency.

Closing date. A target closing date is typically specified, with language that allows for reasonable adjustment. The closing date in the initial contract is often aspirational – the actual closing date is driven by the mortgage commitment timeline and the parties’ schedules.

Deposit. The amount of the contract deposit (typically 10%), when it must be delivered, and who holds it in escrow.

Personal property inclusions and exclusions. What stays and what goes. In New York, fixtures – things attached to the property – typically convey with the sale unless specifically excluded. Personal property – movable items – goes with the seller unless specifically included. The contract should clearly state which appliances are included, whether window treatments stay, and any other items that are the subject of any agreement between the parties.

The Representations and Warranties

The seller makes specific representations about the property in the contract – statements about known conditions, ownership, and legal matters. Key representations typically include:

That the seller owns the property and has the right to sell it. That the property will be delivered in the same condition as at contract signing (subject to normal wear). That the seller is unaware of violations, assessments, or pending litigation not already disclosed. That the property will be delivered vacant and free of tenants.

The scope and language of these representations is often a point of attorney negotiation. Sellers want narrow representations; buyers want broad ones.

The Contingencies

Contingencies are the conditions that must be satisfied for the sale to proceed. As covered in an earlier post, the most common are the mortgage contingency and the inspection contingency. The contract specifies the terms of each: the deadline for satisfying the condition, the process for exercising the contingency to cancel, and what happens to the deposit if a contingency is exercised.

The specific language of contingency provisions matters enormously and is a primary area of attorney negotiation. Pay close attention to: the mortgage commitment deadline and the amount and terms of the mortgage being sought; the scope of the buyer’s rights under the inspection contingency; and the deposit return provisions for each contingency.

The Default Provisions

What happens if one party doesn’t perform? The contract specifies the remedies available to the non-defaulting party.

If the buyer defaults – fails to close without a contractual basis for cancellation – the standard remedy is that the seller retains the contract deposit as liquidated damages. The seller typically does not have the right to sue the buyer for additional damages beyond the deposit.

If the seller defaults – fails to close or cannot deliver what was agreed – the buyer’s remedies typically include return of the deposit plus potential specific performance (a court order compelling the seller to complete the sale).

What Your Attorney Is Looking for During Review

During the attorney review period, your attorney is evaluating whether the representations adequately protect your interests, whether the contingency language provides the protections you need, whether the closing date and timeline are workable, and whether any property-specific issues require additional provisions.

This is not a rubber-stamp process. Legitimate modifications to contract terms are negotiated during attorney review regularly. The process exists precisely so that your interests are protected before you are legally bound.

I guide every client through the contract signing process with full explanation of what they’re agreeing to – so that the signature is an informed choice, not a leap of faith. Call me at (321) 447-4259 or visit movewithricky.com.

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Rakesh (Ricky) Khanna | Licensed Real Estate Salesperson
Better Homes and Gardens Real Estate Realty Connect
Call or text: (321) 447-4259 | movewithricky.com