Final answer:
A buyer who has signed a contract for a property but whose sale has not yet closed has an equitable interest in the property. They hold rights to the property under contract law, which may include entering into contracts regarding the property, and may involve escrow services for handling funds and insurance until completion.
Step-by-step explanation:
When a buyer signs a contract for the purchase of property but the sale has not yet closed, the buyer holds an equitable interest or equitable estate in the property. This means that although the buyer has not yet taken legal title to the property, they have a right to acquire full ownership upon completion of the contract. Until the closing is complete and the deed is transferred, the seller remains the legal owner of the property but the buyer's interest is protected under contract law.
This property interest allows the buyer certain rights, including the capacity to enter into contracts regarding the property. Furthermore, if the contract included an escrow arrangement, it would involve a neutral third party handling funds, and potentially other matters such as home insurance and property taxes, until the real estate transaction is complete. It is important to note that a buyer's ability to enter into contracts related to the property is contingent upon the nature of their equitable interest and the terms stipulated in the initial purchase agreement.