Step 17 - Purchase and Sale is Signed

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What Happens to the Seller When a Purchase and Sale is Signed?

When a seller and a buyer enter into a real estate transaction, one of the most critical stages is signing the Purchase and Sale Agreement. This agreement is a legally binding document that outlines the terms and conditions of the property sale. Once the seller puts pen to paper, their responsibilities and obligations undergo significant changes. In this article, we will explore what happens to the seller after the Purchase and Sale Agreement is signed, along with their responsibilities during this crucial time.

Understanding the Purchase and Sale Agreement

Definition of Purchase and Sale Agreement The Purchase and Sale Agreement, often referred to as the PNS, is a written contract between the seller and the buyer. It includes the essential terms and conditions that both parties have agreed upon for the sale of the property.

Key Components of the Agreement The PNS contains vital information such as the property's description, purchase price, earnest money deposit, contingencies, and the closing date. It serves as a roadmap for the entire sale process and protects the rights of both the seller and the buyer.

After the PNS is signed, and 2nd escrow is received, the seller is responsible for maintaining the property in the condition agreed upon in the contract. If any repairs are stipulated in the agreement, the seller must ensure they are completed satisfactorily.

The PNS may include certain contingencies that must be met before the sale is finalized. These could involve the buyer obtaining financing or completing a satisfactory home inspection. The seller must cooperate and facilitate the fulfillment of these conditions.

Buyers often conduct inspections to assess the property's condition thoroughly. The seller must cooperate with these inspections, providing access to the property and any necessary information.

Potential Legal and Financial Implications for the Seller

Breach of Contract If the seller fails to fulfill their obligations as outlined in the Purchase and Sale Agreement, it could result in a breach of contract. This may lead to legal consequences, financial penalties, or the termination of the sale.  The house is in limbo during the Purchase and Sale period - the seller owns house and maintains house to stay in the same condition as the day the Purchase and Sale was signed.  However, the seller cannot decide from PNS until closing that he/she doesnt want to sell, because they have no place to go after sale.

Contingencies in the PNS provide opportunities for the buyer to back out of the deal under specific circumstances. The seller must be aware of these contingencies and their potential impact on the transaction.

Buyer can receive their escrow back if there is a mortgage commitment and bank denies buyers commitment.   Like an interest rate increase - which buyer cannot afford house with new rates.

In some cases, the sale process may require more time due to unforeseen circumstances. The seller may need to consider granting extensions (especially with new construction) or negotiating contract terminations if necessary.


Signing the Purchase and Sale Agreement is a crucial step in a real estate transaction. For the seller, it marks a shift in responsibilities from marketing the property to upholding the agreed-upon terms and conditions. From preparing the property for sale to cooperating with inspections, sellers play a significant role in ensuring a successful transaction. Understanding the legal and financial implications involved can help sellers navigate the process smoothly, ultimately leading to a successful sale.


Can the seller back out after signing the Purchase and Sale Agreement?

While the PNS is a legally binding contract, certain contingencies may allow the seller to terminate the agreement without penalties.

Is the seller responsible for repairs requested by the buyer during inspections?

It depends on the terms outlined in the Purchase and Sale Agreement.

The seller may be responsible for certain repairs based on negotiations.


What happens if the seller fails to disclose known property defects?

Failure to disclose known defects could lead to legal issues and potential financial liabilities for the seller.

Can the buyer request changes to the PNS after it is signed by both parties?

Typically, both parties must agree to any changes in the PNS after it has been signed.

What happens if the buyer fails to fulfill the agreed-upon conditions in the PNS?

The seller may have the option to terminate the agreement if the buyer fails to fulfill agreed-upon conditions within the specified time frame.