Regardless if you’re purchasing or selling real estate, the transaction will involve signing important legal documents. These documents are part of the safeguards that ensure both parties are aware of their rights and responsibilities as well as the terms and conditions of the transaction. A verbal offer is not enough. The written contract is what moves the transaction forward.
Doing your research means reading between the lines of contracts and respecting the importance of careful adherence to NY property law. A Manhattan real estate attorney can keep your transaction on track while you stay focused on your goals.
At Avenue Law Firm, our team can help buyers and sellers move from offer to closing efficiently and effectively. Talk with us about your situation, get clear next steps, and feel confident about your path forward. To learn more about how we can help you, contact us today at (212) 729-4090 to schedule a complimentary consultation.
Experienced Real Estate Attorneys at Avenue Law Firm Explain the Definition of a Fully Executed Contract
Real estate contracts are legal documents setting out the terms under which a property will be transferred between two or more parties. The deal is finished at closing, not when you first sign. Until then, the contract outlines the parties’ rights, duties, timelines, and contingencies on the way to closing.
A “fully executed contract” can mean two things. First, it can mean the contract has been fully performed according to its terms. All stakeholders in the agreement have accomplished their roles and obligations based on the conditions set by the contract.
A contract being “fully executed” can also mean that all stakeholders have signed the contract and expressed their agreement regarding the terms, and allow themselves to be bound by the contract.
Using the meaning in this second context, executed real estate contracts formalize the sale, purchase, or lease of a property. The contract should include the following information:
- A legal description of the property
- The price discussed for the transaction
- Information about the buyer’s financing (e.g., loan type, down payment, commitment deadline); for leases, the tenant’s payment terms
- Deadlines of home inspections, repairs, mortgage commitments, and the submission of other important documents as needed in the transaction.
- The agreed closing date
- Contract contingencies
- Stakeholder signatures
Parties signing the contract should be of legal age and have the legal capacity to engage in a transaction.
Here’s how it typically works in New York. You start with an offer. Even if the seller accepts, that acceptance is not binding until a formal written contract is signed by both sides. “Binders” or letters of intent are often treated as non-binding in New York City practice. That said, they can turn into enforceable agreements if they are in writing, include the essential terms, and clearly show an intent to be bound. If you do not want a binder to lock you in, skip it and move straight to a fully written contract prepared by your lawyer.
Before you sign that contract, your real estate attorney should do due diligence on the property. That means checking the building and unit history, reviewing documents, and flagging problems. It also helps to bring in property inspectors and confirm the title is clean, so you avoid surprises.
Once both sides sign, it will be considered a ‘fully executed’ contract. You and the other party are now “in contract” and bound by what the document says.
Having a seasoned Manhattan real estate attorney on your side can make the process smoother and protect your goals. At Avenue Law Firm, our top-rated New York City real estate attorneys have assisted in numerous transactions. From sending an offer to the final closing processes, our attorneys can assist with your real estate transaction at all stages. Contact us today at (212) 729-4090 to schedule a consultation.
Manhattan Real Estate Attorney
Peter Zinkovetsky, Esq.
Peter Zinkovetsky is the founder of Avenue Law Firm and a Manhattan real estate attorney trusted by local and international clients for high-stakes property transactions. Drawing on a business background and years of deal experience, Peter guides buyers, sellers, investors, and businesses through New York’s market with clear strategy, responsive service, and practical risk management. His practice also includes property and business insurance matters that intersect with real estate.
Widely recognized for excellence, Peter has been named a Super Lawyers Rising Star for eight consecutive years, an honor awarded to fewer than 2.5% of attorneys in New York. He holds a perfect 10.0 Avvo rating, earned Avvo’s Clients’ Choice Award (2017), and was featured on the New York Real Estate Journal’s 2018 Ones to Watch list. A frequent educator and commentator, he teaches continuing education courses, contributes articles (including to the New York Real Estate Journal), and is often featured in outlets such as Forbes, the New York Post, The Real Deal, the New York Observer, and Newsweek. Peter earned his J.D. from New York Law School and a B.B.A. in Finance from Pace University, and he is admitted to practice in New York and the U.S. District Courts for the Southern and Eastern Districts of New York. He is fluent in English, Russian, and Ukrainian.
What Is the Difference Between Executed and Executory Contracts?
Executed and executory contracts are not the same. An executory contract is a signed, binding agreement where one party still has material duties to perform. This could involve performing a service, making scheduled payments, completing necessary inspections, or executing final documents. An executed contract is complete. All promises are performed, consideration has changed hands, and nothing substantive remains. At that point, the deal is complete and enforceable, with only limited post-closing warranties surviving.
A common real estate example of an executory contract is an installment sale, also called a contract for deed. You and the seller agree on a price, but you pay in installments over months or years. The seller keeps legal title until the last payment. You take possession and make monthly payments, keep insurance, and follow maintenance or tax obligations. The contract stays executory throughout because both sides owe duties. You must pay on schedule, and the seller must deliver the deed once paid in full.
Why does this distinction matter to you in Manhattan? It shapes risk, default remedies, and timing. Missed deadlines can trigger cancellation, loss of deposits, or specific performance claims. A Manhattan real estate attorney can review the language, calendar dates, negotiate milestones, set up escrow, track contingencies, coordinate title searches and filings, and guide you from signed to truly executed.
What Is an Executed Purchase Agreement?
An executed purchase agreement in real estate is a legally binding contract that has been fully signed by all parties involved in the transaction. The term “executed” signifies that the document has been signed and all necessary actions to make it legally enforceable have been completed. This agreement details the sale terms, including the agreed-upon purchase price, property description, contingencies, and closing conditions.
Key elements of an executed purchase agreement include accurate property details, any required seller disclosures, and detailed contingency clauses addressing conditions such as appraisal results or the buyer’s ability to secure financing. Deadlines are also typically established for completing these tasks, emphasizing the importance of timely performance under the terms of the agreement. Both parties must thoroughly review the terms before signing, as the document becomes legally binding upon execution.
The point at which a purchase agreement is executed is crucial because it marks the transition from negotiating terms to a binding commitment to proceed with the transaction as outlined. The document also specifies remedies in case of non-compliance by either party, such as the forfeiture of a deposit or potential legal action, ensuring that both parties understand their obligations and the consequences of failing to meet them.
The distinction between an executed purchase agreement and a broader real estate contract is important. An executed purchase agreement specifically refers to the signed document that formalizes the transfer of property between the buyer and seller. In contrast, a real estate contract is a more general term that can include various agreements related to real estate, such as leases, rentals, or other legal arrangements beyond property sales.
For anyone involved in buying or selling property in Manhattan, understanding the significance of an executed purchase agreement is essential. Buyers and sellers are advised to consult a qualified attorney to review the document and address any ambiguities or issues that could arise during the process. This step helps protect their interests and ensures compliance with applicable legal requirements.
Importance of an Executed Real Estate Contract
Executed real estate contracts protect all stakeholders involved in the transaction. While there are ready-made contracts made available by the local government itself, it is still important to make sure that your contract is legally binding and properly executed to ensure that any issues are dealt with in a timely manner. Aside from the necessary details in a contract, such as the description of the property, the agreed price, financing options, and such, contracts can also include ‘riders’, which are add-ons or customizations to the transaction.
Adding riders to the contract can ensure that these changes would be honored as part of the transaction itself and make it a legal obligation of the stakeholders to accomplish. These contingencies can include the completion of any improvements in the property that have not yet been completed but have already been negotiated when the contract was drafted.
Your contract will specify a closing date, but in New York, that date is typically “on or about” and not a strict deadline unless the contract expressly makes time of the essence or one party later serves a proper time-of-the-essence notice after a missed date. Without “time of the essence,” each side gets a reasonable adjournment to close.
Contracts are unlikely to be a one-and-done deal. Contracts would likely change before being signed, depending on new terms about the transaction being negotiated. Your contract acts as the road map of your transaction, and ensuring that it is created accurately and legally can help avoid costly mistakes down the road.
| Feature | Executory Contract | Executed Contract |
|---|---|---|
| Definition | A contract where one or more obligations remain unperformed | A contract where all obligations have been fully performed |
| Status of performance | Ongoing duties such as payments, services, or delivery are outstanding | Complete with nothing substantive left except minor warranties |
| Example | Installment sale or contract for deed with payments over time | Completed real estate sale with full payment and deed transfer |
| Risk and remedies | Higher risk of default, remedies may include cancellation or litigation | Lower risk, enforcement limited to surviving or minor obligations |
Working With Our Top-Rated NYC Real Estate Attorneys at Avenue Law Firm
New York’s real estate market is highly competitive. People without direct knowledge of the market and the specific legal provisions governing property transactions can find the process overwhelming. Our team of real estate attorneys at Avenue Law Firm is well-versed in the legal issues and complications that are often involved with real estate transactions in New York.
We provide quality legal guidance and services including investigating the details of your transaction, drafting important legal documents, negotiating terms, as well as reviewing any existing agreements and documents involved in your transaction. Our attorneys take proactive measures to avoid possible disputes and issues to save both time and money.
Hiring an attorney to help in your transaction is not mandatory in New York but the benefits of working with an experienced real estate lawyer to ensure that your transaction is concluded efficiently and smoothly are evident. We offer a complete range of professional legal services aimed at assisting you in achieving your real estate goals. Contact us today at (212) 729-4090 to schedule a free consultation.
