Contracts
In New York, a 'binder' in a real estate transaction is:
AA legally binding contract enforceable in court
BA preliminary memorandum of agreed terms, often not a binding contract until a formal contract is signed✓ Correct
CThe same as a deed
DA title insurance commitment
Explanation
In New York, a binder is typically a preliminary document summarizing agreed terms. Because New York requires a written and signed contract for enforcement under the Statute of Frauds, a binder is generally not an enforceable contract unless it contains all essential terms and is signed by both parties.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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