What is a PSA in real estate?

PSA stands for Purchase and Sale Agreement. It's the binding pre-closing contract that governs the process and conditions of a real estate transaction. It's different from the final purchase agreement signed at closing.

Can a real estate attorney draft a real estate contract in New York?

Yes — and in New York, this is the norm. Real estate agents are not permitted to draft contracts. That responsibility belongs to licensed attorneys, which is one reason attorney involvement in New York transactions is standard on both sides.

Who prepares the purchase agreement in New York?

The seller's attorney typically prepares the initial contract. The buyer's attorney reviews it, negotiates changes, and advises the buyer before it's signed. This back-and-forth between attorneys is a standard part of the New York real estate process.

Is a purchase and sale agreement legally binding?

Yes. Once both parties sign, they are bound by its terms. Backing out without legal justification — such as a failed contingency — can result in losing your deposit or facing legal action.

What does a purchase contract attorney do?

A purchase contract attorney drafts, reviews, and negotiates the PSA on your behalf. They identify problematic language, protect your interests on contingencies and deposits, coordinate with the title company and opposing counsel, and represent you at closing.

Purchase and Sale Agreement in NYC: What You Need to Know

1. Purchase Price: The agreed-upon sale price, including any seller concessions or credits negotiated between the parties. This number can shift during negotiations, and the PSA should reflect whatever was actually agreed.

2. Earnest Money Deposit: How much the buyer is putting down as a deposit, when it’s due, and the exact conditions under which it’s refundable — or not. In New York, deposits are typically held in escrow by the seller’s attorney. Buyers need to understand that under certain circumstances, walking away can mean losing that money entirely.

3. Closing Date: The target date for finalizing the transaction. In NYC real estate, closing dates move. Co-op board reviews, mortgage underwriting delays, and title issues all cause timelines to shift. A well-drafted PSA addresses how delays are handled so neither party is left exposed.

4. Contingencies: Contingencies are conditions that must be satisfied for the transaction to move forward. Common ones in New York include:

1. Title Search: The buyer’s attorney orders a thorough title search to confirm the seller has the legal right to sell and that the property is free of outstanding liens or defects. In New York City — where properties change hands frequently and carry complex histories — this step is not optional.

2. Home Inspection: A licensed inspector examines the property for structural issues, code violations, and necessary repairs. Findings can trigger renegotiations or allow the buyer to invoke an inspection contingency and exit the deal.

3. Mortgage Commitment: Pre-approval is not a mortgage commitment. After the PSA is signed, the buyer’s lender formally underwrites the loan and issues a written commitment. This takes time, and the PSA should give the buyer adequate time to secure it.

4. Co-op or Condo Board Approval: This step is unique to New York — and it’s the one that catches the most out-of-state buyers off guard. Co-op purchases require a board package, an interview, and formal board approval. This process can add weeks or months to a transaction and can result in rejection. A good PSA accounts for this possibility.

5. Closing: Both parties meet with their attorneys, final documents are signed, funds are transferred, and title is recorded. In New York, having your attorney present at closing isn’t optional — it’s standard, and it protects you when last-minute issues arise.