When searching for your dream home, you may come across some listings that say “under contract” in their status. This term can be confusing for first-time homebuyers, but it’s important to understand what it means and how it can affect your home buying journey. In this article, we’ll dive into the meaning of under contract and what it entails for buyers.
Under contract is a term used in real estate to indicate that a property has an accepted offer from a buyer, but the sale has not yet been completed. This means that the seller has accepted an offer from a buyer and both parties have signed a purchase agreement, but the sale is not yet final. The property is still technically on the market, but it is not available for other buyers to make offers on.
When a property is under contract, it means that the seller has accepted the terms of the offer and is legally bound to sell the property to the buyer. This also means that the buyer is legally bound to purchase the property, as long as all the conditions outlined in the purchase agreement are met. These conditions may include a home inspection, financing, or appraisal.
So, what does this mean for buyers? First and foremost, it means that the property is no longer available for other buyers to make offers on. If you come across a listing that is under contract, you can still express your interest in the property to the seller or their agent, but you will not be able to make an offer. However, if the sale falls through for any reason, the property will go back on the market and you will have a chance to make an offer.
Being under contract also means that the buyer has a certain period of time to complete all the necessary steps before the sale can be finalized. This includes conducting a home inspection to identify any potential issues with the property, securing financing, and obtaining an appraisal to determine the value of the property. If any issues arise during these steps, the buyer may have the option to renegotiate the terms of the purchase agreement or even back out of the sale altogether.
One of the main benefits of buying a property that is under contract is that there is less competition from other buyers. This can be especially beneficial in a hot real estate market where properties are selling quickly. By finding a property that is under contract, you may have a better chance of securing your dream home without facing a bidding war.
However, there are also some potential drawbacks to consider when buying a property that is under contract. The main risk is that the sale may fall through, leaving you back at square one in your home buying journey. This could happen if the buyer is unable to secure financing or if issues arise during the home inspection that cannot be resolved. It’s important to thoroughly research the property and its history before making an offer to minimize the risk of the sale falling through.
In conclusion, under contract is a term used in real estate to indicate that a property has an accepted offer from a buyer, but the sale has not yet been completed. For buyers, this means that the property is no longer available for other offers and the sale is in the process of being finalized. While there are some potential risks involved, buying a property that is under contract can also have its benefits. It’s important to carefully consider all factors and work closely with your real estate agent to navigate the process smoothly. Happy house hunting!