A forward sale agreement refers to a contract between a seller and a buyer where the buyer agrees to purchase a specific asset at a predetermined price and time in the future. It is a common financial instrument used in various industries, including real estate, commodities, and securities.

In real estate, a forward sale agreement can be used by developers to secure future buyers for their properties before construction is completed. This agreement allows developers to reduce the risk of unsold units and provides them with upfront financing for their projects. The buyer, on the other hand, benefits from purchasing the property at a lower price than the market value at the time of completion.

In the commodities market, forward sale agreements allow producers to hedge against price fluctuations by agreeing to sell their products at a fixed price in the future. This type of agreement provides certainty for both parties and protects them from potential losses due to market volatility.

In the securities industry, forward sale agreements can be used in the context of stock options or restricted stock units (RSUs). An employee may receive RSUs as part of their compensation, but they usually cannot sell them until a specific date. By entering into a forward sale agreement, the employee can sell their RSUs at a predetermined price before the vesting period ends.

In summary, a forward sale agreement is a contract that allows a seller and a buyer to agree on a future transaction price and date. It is a useful tool for managing risk and uncertainty in various industries and provides both parties with greater financial security.