In New York State, there are two (2) authorities on real estate contracts. The NYC BAR Association and the NY Association of Realtors both have a standard contract you can use. These contracts show you what information is required, though it might not be specific to your conditions.
The NY Statute of Fraud states that all purchase contracts must be in writing to be legally binding. Oral agreements won’t be acceptable in a court of law.
All NY contracts have four (4) essential elements: Legal Capacity: Both seller and buyer must be able to enter into the contract legally. They must be of sound mind, of age, and not under the influence of any mind-altering substances like drugs or alcohol.
Offer and Acceptance: The contract must show a valid offer, generally by the buyer, and acceptance of that offer, usually from the seller.
Consideration: Both parties must exchange something of value. It’s generally where the buyer “exchanges” money for property ownership.
Mutual Assent: Both parties must understand and mutually agree to enter the contract and exchange the items of value.
In New York, buyers can use a short offer form to make an offer for the property. This form isn’t legally binding as an agreement to purchase the property.
A valid purchase and sell agreement is only considered legally binding once both parties sign it.
It should include the following information: Identities of both parties
Property’s legal description
The purchase price both parties agreed upon and eligible payment methods
Contingencies, like financing, insurance, and title deeds
Closing date of the property transfer after signing the contract
There are also other terms, though these aren’t required by law. However, adding them to protect yourself legally might be a good idea. Any terms surrounding inspections and appraisals
Dispute resolution and defaults
Any additional fees one of the parties is responsible for, like closing fees.
Earnest money deposit: In NY, it generally ranges between 1% and 5%. However, depending on the property, it can go up to 10%.
While this state doesn’t have many required disclosures, there are some you must consider. Without these clauses, your contract will become invalid.
Lead-Based Paint Disclosure: This disclosure is only valid for properties built before 1978. If the building has lead-based paint, the seller must inform the buyer about it.
Property Condition Disclosure: The seller is responsible for informing the buyer about the property’s condition. It must describe the utilities and any defects. If the seller doesn’t provide this information, the buyer receives a $500 credit at closing.
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The New York Real Estate Purchase Agreement is a legally binding contract that outlines the terms and conditions for the sale of real property in the state of New York. This comprehensive document includes crucial details such as the purchase price, closing date, contingencies, and other provisions agreed upon by the buyer and seller, serving as the foundation for a transparent and regulated real estate transaction in the state.
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