📝 What Is an Executory Sales Contract in Real Estate?

An Executory Sales Contract is a real estate agreement that has been signed by all parties but has not yet been fully performed. This means certain obligations — such as inspections, financing, repairs, title work, and closing — still need to be completed before the contract becomes fully executed and the sale is finalized.

How an Executory Sales Contract Works

Once a contract is signed (executed) and delivered (ratified), it enters the executory period. This is the phase between ratification and closing where both parties must fulfill their contractual obligations.

Common items still pending during the executory period include:

  • Buyer inspections — home inspection, pest inspection, sewer scope, etc.
  • Appraisal — lender orders and reviews property value.
  • Financing approval — buyer secures final loan commitment.
  • Title search + insurance — title company clears title and prepares documents.
  • Repairs — seller completes agreed-upon repairs or credits.
  • HOA or condo document review — if applicable.
  • Settlement preparation — both parties prepare for closing.

The contract remains “executory” until all these obligations have been met and ownership is transferred at closing.

Why an Executory Sales Contract Matters

Benefits for Buyers:

  • Allows time to complete due diligence such as inspections and financing.
  • Provides legal protections through contingencies.
  • Ensures the seller cannot accept another offer during the executory period.
  • Gives buyers time to review disclosures and HOA documents.

Benefits for Sellers:

  • Confirms buyer commitment while still protecting seller deadlines.
  • Allows time to complete repairs or agreed-upon obligations.
  • Prepares the seller for closing with clear timelines.
  • Ensures the path to settlement follows a structured process.

Example of an Executory Contract

Here’s what the executory period looks like in a typical transaction:

  • The contract is signed and delivered → ratified.
  • The buyer completes inspections.
  • The lender orders the appraisal.
  • The title company completes the title search.
  • The seller makes agreed repairs.
  • The buyer secures final loan approval.
  • Closing occurs and the deed transfers.

From ratification until closing, the contract is considered executory.

Why It Matters for FSBO Sellers

FSBO sellers must understand the executory phase to avoid mistakes that could delay or derail closing.

  • Ensures required steps are completed on time.
  • Helps track buyer performance (financing, inspections, appraisal).
  • Clarifies repair obligations and deadlines.
  • Reduces risk of disputes or failed closings.

When listing with Flat Fee MLS through Brokerless, sellers receive guidance to stay compliant throughout the executory period.

Frequently Asked Questions

Is an executory contract the same as a ratified contract?
No. A contract becomes ratified once it is signed and delivered. It becomes executory during the period when obligations remain to be completed before closing.

When does an executory contract end?
It ends at closing when all terms are fulfilled and the deed transfers to the buyer.

Can a buyer cancel during the executory period?
Yes — if contingencies allow (inspection, appraisal, financing, HOA review, etc.).

Does the seller have obligations during the executory period?
Yes. Sellers may need to complete repairs, provide disclosures, allow inspections, and prepare title documents.