When browsing listings for homes on the market, you may come across the term “under contract” next to certain properties. This can be confusing, especially if you`re not familiar with the real estate industry or the terminology used. Here, we`ll break down what it means when a home is listed as “under contract,” and what you can expect if you`re interested in purchasing one of these properties.
What does “under contract” mean?
When a home is listed as “under contract,” it means that the seller has accepted an offer from a buyer, and the two parties have signed a legally binding contract. This contract outlines the terms and conditions of the sale, including the purchase price, any contingencies (such as a home inspection or financing), and the expected closing date. Essentially, a home that is under contract is in the process of being sold, but the sale is not yet finalized.
Why do homes go under contract?
When a seller receives an offer on their home that they`re happy with, they may choose to accept it and enter into a contract with the buyer. Accepting an offer means that the seller agrees to sell the home to the buyer for the price and terms outlined in the contract. In some cases, there may be multiple offers on a property, and the seller will choose the one that they believe is the strongest or most favorable.
What happens to a home that`s under contract?
Once a home is under contract, the buyer and seller will typically have a set period of time (usually a few weeks) to complete any contingencies outlined in the contract. For example, the buyer may need to have a home inspection done to ensure that the property is in good condition, or they may need to secure financing from a lender. If any issues arise during this period (such as a problem found during the inspection), the two parties may need to negotiate to find a solution that both are comfortable with.
Assuming that all contingencies are met and the sale proceeds as planned, the closing date will arrive, and the buyer will take ownership of the property. At this point, the home is considered sold and is no longer listed as “under contract.”
What does this mean for buyers and sellers?
For buyers, seeing a home listed as “under contract” may be disappointing, as it means that the property is no longer available for sale (at least for the time being). However, it`s worth noting that sometimes contracts fall through, and a home that was previously under contract may become available once again. Additionally, if you`re interested in a home that`s under contract, it may be worth speaking to a real estate agent who can help you understand the likelihood of the contract proceeding and suggest alternative properties that may be suitable for you.
For sellers, having a home listed as “under contract” is a positive sign, as it means that they`ve received an offer that they`re happy with. However, it`s worth remembering that until the sale is finalized, there is still a chance that it could fall through. It`s important for sellers to work closely with their real estate agent and ensure that they`re meeting all the terms and conditions of the contract to minimize the risk of any issues arising.
In conclusion, when a home is listed as “under contract,” it means that a seller has accepted an offer from a buyer, and the two parties have entered into a legally binding contract. While this can be disappointing for prospective buyers, it`s an important step in the homebuying process and one that signals that a property is in the process of being sold. If you`re interested in purchasing a home that`s under contract, it`s worth speaking to a real estate agent who can help you understand the situation and suggest alternative properties that may be suitable for you.
