So, you’ve stumbled upon your dream home, only to find out it’s marked as “under contract.” Cue the disappointment, right? Well, not so fast. Contrary to popular belief, a house being under contract doesn’t necessarily mean it’s off the market for good. In fact, there’s still a glimmer of hope for eager buyers like you. Let’s delve into the intricacies of what it truly means when a house is under contract, straight from the experts.
Understanding “Under Contract”
When you see that coveted “under contract” label attached to a property, it signifies that both the seller and the buyer have come to terms regarding the sale. Essentially, a contract has been drawn up, signed by both parties, and earnest money has been deposited by the buyer as a gesture of commitment.
Earnest money, typically amounting to around 1% of the home’s sale price, is a tangible display of the buyer’s sincerity in purchasing the property. This sum is credited towards the buyer’s closing costs and serves as a safeguard against flippant decisions, as it may be forfeited if the buyer withdraws from the deal prematurely.
After “Under Contract”
So, what happens next? Well, buckle up, because there’s a checklist of tasks awaiting both the buyer and the seller before the sale is sealed. As the buyer, it’s imperative to conduct thorough due diligence within the initial 10 days post-contract acceptance. This involves arranging property inspections, scrutinizing disclosures, and ensuring financing is in order, especially if a mortgage is involved.
Meanwhile, sellers must maintain their property’s allure for potential backup offers while addressing inspection findings and making necessary repairs. Communication with agents remains paramount throughout this phase, as both parties inch closer to the closing table.
Transition to “Pending”
As the transaction progresses, the status of the home will typically transition from “under contract” to “pending.” While in Texas these terms are used interchangeably, elsewhere, they hold distinct meanings. “Under contract” implies agreement between buyer and seller, while “pending” suggests that all contingencies have been met, signaling the final stages of closure.
The Back-Up Offer Avenue
But wait, there’s more! Despite a home being under contract, sellers may opt to continue showcasing the property to entertain backup offers. This strategic move provides a safety net in case the primary deal falls through due to financing hiccups or other unforeseen circumstances.
For buyers eyeing an under-contract gem, hope isn’t lost. Submitting a backup offer remains a viable option, offering a second chance at securing the property should the initial contract unravel.
Under Contract Doesn’t Equate to Unattainable
Although online property portals may flag homes as under contract, this information isn’t always up-to-date. For accurate status updates, enlisting the guidance of a real estate agent proves invaluable. With access to comprehensive databases and insider insights, agents can navigate the labyrinth of real estate statuses with ease, ensuring you stay well-informed throughout the process.
In essence, the key to navigating the under-contract period of a contract involves maintaining composure and open communication between the agents. With a seasoned real estate agent by your side, you can navigate the twists and turns of the market with confidence, whether you’re buying or selling. So, take a deep breath, stay informed, and let the experts guide you towards your real estate aspirations.
