If S does not own the property at the time of the PSA but later acquires it, what happens at closing?

When S does not own the property at the time of the Purchase and Sale Agreement (PSA) but subsequently acquires it before closing, the title passing to B at closing occurs because of the principle of specific performance in real estate contracts.

In a standard real estate transaction, when both parties enter into a binding contract, they are obligated to follow through with the terms of that contract. If S acquires the property before the closing date, S can then fulfill the obligations outlined in the PSA, which includes the transfer of title to B.

This situation addresses the typical scenario of real estate transactions where the seller may not possess the title at the onset of the agreement, but under the law, they are still able to convey ownership once they acquire the title. Therefore, closing can proceed normally, enabling the title to pass to B as intended in the PSA. This viewpoint assumes that all other contractual obligations are met and that there are no title defects or other impediments.

Other options would pose complications that are not consistent with the typical outcomes in real estate transactions. For example, if S cannot transfer title, that situation would usually arise if ownership was never obtained, leading to a breach of contract. However, such a breach would not be the case