What Does Under Contract Mean in Real Estate?
What Does Under Contract Mean in Real Estate?
As you search for a home, you may encounter listings marked "under contract" or "contingent." To ensure the best experience when viewing these properties, it is crucial that you fully understand these terms and their significance.
Even though a home under contract might dissuade some buyers, don't give up! You might still make an offer as a backup option.
Buyer’s Offer
As you search for your first home or investment property, it's essential that you understand the terminology associated with real estate transactions. Properties often advertised as being under contract or "pending sale" can be very misleading to new buyers and cause confusion when trying to purchase.
Once they've found the ideal property, buyers will work with their agent to submit an offer to purchase. This offer should include details such as purchase price, closing dates, and payment terms; in certain markets and situations multiple buyers may submit separate bids that differ significantly from asking price.
The seller will carefully consider any offers made by buyers and accept it if they find them acceptable. There may be contingencies attached to an offer which must be fulfilled before it can close; otherwise either party can withdraw the contract and make alternative offers instead. Buyers can also submit backup offers on properties under contract that were already under contract before placing their original bids.
Seller’s Acceptance
Once a seller accepts an offer, it becomes binding and irrevocable – typically by signing an agreement of sale or contract – making both parties bound by its terms.
Sellers cannot withdraw an accepted offer without evidence that demonstrates bad faith on behalf of the buyer, or injury caused. Therefore, it's vital that any offer accepted and submitted into escrow as soon as possible.
Home buyers often come across properties that are "active under contract" or even "sale pending." When a property falls into this category, this typically indicates all contingencies have been fulfilled and the sale is headed towards closing. But just because a property is under contract doesn't mean its seller won't consider any backup offers; to be on the safe side, make sure your agent reaches out directly to them and see whether they accept backup offers.
Contingencies
Home sales contracts become official once an offer has been accepted by both buyer and seller, all contingencies have been satisfied, and all required conditions have been fulfilled. Buyers typically work with their real estate agent to draft contracts containing these conditions – typically financing and inspection contingencies are among them, which allow potential buyers to have preapproved mortgage financing and an independent professional inspect the condition of a home before final closing.
Home buyers may add contingencies into their purchase agreements that allow them to back out if they can't find another property within a specified time period; their earnest money deposit would then be returned. Once a house goes under contract, however, it typically remains off market until all contingencies have been fulfilled and ownership transferred during closing process.
Closing
Under contract means a home has been accepted by both seller and buyer, yet still has some contingencies that need to be fulfilled before finalizing its sale. Most often this means home inspection and mortgage contingencies need to be fulfilled first before closing can take place.
Therefore, having an excellent Realtor on your team can make all of the difference when purchasing or selling a home. They are experts at guiding clients through what can often be a complex process of buying or selling their current one.
Even though it can be disheartening to see your dream home listed as under contract on real estate websites, don't lose hope! It is common practice for buyers to submit backup offers when homes go under contract – having one in place can increase your odds of securing it, particularly if the deal falls through for reasons outside your control such as sale of another property or lender withdrawal of financing.
Savannah ga real estate agents
What Does Under Contract Mean in Real Estate? As you search for a home, you may encounter listings marked "under contract" or "contingent." To ensure the best experience when viewing these properties, it is crucial that you fully understand these terms and their significance. Even though a home under contract might dissuade some buyers, don't…