Selling a Co-op in NYC: The Negotiation and Signing of a Contract of Sale

The Negotiation and Signing of a Contract of Sale

As mentioned, until such time that a contract of sale is fully signed, there should be no deal unless somebody has mistakenly entered into a contract of sale. Let us assume of course that no one has mistakenly entered into a contract of sale. The Contract of Sale is of course a crucial document. The terms of a Contract of Sale memorialize the agreement between the Seller and Purchaser. You may not use the excuse that you did not know what you signed. If you do not understand something you must ask for clarification. Many years ago Attorneys had essentially agreed among themselves through custom in the industry, etc., that there would be one form of a Contract of Sale and all Attorneys would essentially use that form. Nowadays, there are many permutations of form Contracts of Sale, produced by a litany of distributors of form documents. As such, the Contract of Sale has become a highly negotiated document containing many terms, provisions, agreements, representations, contingencies, etc. On top of the many forms that are used by Attorneys, Attorneys add what is known as “rider” to the Contract of Sale. Contract riders also have many terms and may be very confusing to a Cooperative Seller. An experienced Attorney like Kishner Miller Himes will be able to inform you what customarily is and should not include in a fair and equitable Contract of Sale.

The formal procedure of entering into a contract of sale:

1. Deal sheet/transaction summary sheet circulated to the sellers attorney and the purchaser’s attorney ;
2. Sellers attorney prepares a contract of sale and sends it to the purchaser’s attorney ;
3. Purchases attorney reviews the contract of sale and provides comments back to the sellers attorney and sometimes adds a purchaser’s rider containing further terms and conditions ;
4. Contract of sale is considered to be finalized by the purchasers and sellers attorney so that a finalized contract of sale is sent to the purchasers attorney for purchaser’s signature ;
5. Purchaser’s attorney sends the contract of sale to the purchaser for purchaser’s signature and return of the purchaser signed contract of sale to the purchasers attorney along with a contract deposit check usually in the amount of 10% of the purchase price which 10% contract deposit check is made payable to the sellers attorney as escrow agent ;
6. After purchases attorney’s receipt of the purchaser signed contract of sale along with the contract deposit check in the sum of 10% of the purchase price, purchases attorney sends the contract of sale to the sellers attorney with the contract deposit check.
7. Sellers attorney sends the contract of sale to the seller for signature and informs the seller that the sellers attorney has the 10% contract deposit check in its possession
8. Seller signs off on the contract of sale in the same general locations as where the purchaser signed the contract of sale
9. Sellers sends back the fully signed contract of sale to the sellers attorney;
10. The sellers attorney now sends the fully signed contract of sale to the purchases attorney declaring that there is now a fully signed binding transaction between the seller and the purchaser.