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What does it mean if a real estate property is under contract

Discover the implications of a real estate property being under contract in the US. Learn about the process, parties involved, and what it means for buyers and sellers.

Introduction

When it comes to the world of real estate, there are numerous terms and phrases that may seem unfamiliar to the average buyer or seller. One such term is "under contract." If you've encountered this phrase during your real estate journey, you may be wondering what it means and how it impacts the buying or selling process. In this article, we'll delve into the meaning of a real estate property being under contract and shed light on its significance in the US real estate market.

Understanding the Under Contract Status

The under contract status refers to a crucial stage in a real estate transaction. It means that the buyer and seller have reached an agreement and have signed a legally binding contract. This agreement outlines the terms and conditions of the sale, including the purchase price, financing arrangements, and any contingencies that need to be met.

Parties Involved in an Under Contract Property

When a property is under contract, there are several parties involved in the transaction:

  1. Buyer: The individual or entity interested in purchasing
Under contract means that a seller has accepted an offer on the property, but the sale isn't final until all contingencies are met. It typically takes 4 – 8 weeks from the date the offer is accepted until the sale is complete.

What's the difference between pending and under contract?

Under contract vs. sale pending: What's the difference? While “under contract” typically means there are still contingencies left to clear, pending status usually means all contingencies have been met and the deal is on its way to closing. Pending listings are less likely to accept backup offers.


Why would a home be under contract for so long?

If significant repairs are needed, it can prolong the under-contract period as negotiations continue. Another factor that can impact the length of the under-contract period is the financing contingency.

Can you make an offer on a house that is active under contract?

Can I make offers on homes that are listed as 'active under contract'? You can. But sellers can't accept your offer if they've already signed a purchase and sales agreement with other buyers, even if your offer is higher. If the sale doesn't reach closing, though, the sellers can consider your offer.


Is under contract the same as contingent?

Once your home is under contract, but some contingencies need to be met, your property is considered contingent. A contingent contract means that some condition hasn't yet been met, and both parties have not agreed to move forward with executing the deal as planned.

Does under contract mean a house is sold?

The Bottom Line: A Home Under Contract Isn't Quite Sold Yet

A home that's under contract indicates a seller has accepted a buyer's offer to purchase the property. But before the sale of the home can actually close, certain contingencies must first be met. Otherwise, the deal can still fall through.

What does it mean when Zillow says under contract?

'Under Contract' is probably the most accurate way to describe a pending or 'contingent' sale. It means the same as the other statuses above; a buyer and seller have agreed to terms and have executed a contract. But, the contract has yet to go to closing.

Frequently Asked Questions

Why does a house for sale say under contract?

“Under contract” means the seller has accepted an offer, but there are still conditions to clear before closing. “Active under contract” means the seller is welcoming backup offers. “Pending” means the home is under contract, and all conditions have been met for the deal to close.

What is difference between under contract and pending?

Key Takeaways. “Under contract” means the seller has accepted an offer, but there are still conditions to clear before closing. “Active under contract” means the seller is welcoming backup offers. “Pending” means the home is under contract, and all conditions have been met for the deal to close.

What not to do while under contract for a house?

Here are some things to avoid in the run-up to the big day:

  1. Don't Mess with Your Income-to-Debt Ratio. The ratio of your monthly income to your monthly debts is one of the main factors the lender considered when qualifying you.
  2. Don't disappear.
  3. Don't change jobs.
  4. Don't open new credit cards.
  5. Don't be late.

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