When you`re in the market for a new home, you`ll likely come across the term “under contract” quite frequently. But what does it actually mean?
In short, when a house is under contract, it means that a buyer and seller have entered into a legally binding agreement that outlines the terms and conditions of the sale. This agreement is typically known as a purchase agreement or a sales contract.
Once a home is under contract, it`s essentially off the market. While other potential buyers can still express interest in the property, they won`t be able to make an offer or enter into their own contract until the current agreement falls through.
So, what happens when a home is under contract? Typically, the buyer will have a period of time to complete their due diligence and ensure that the home is in the condition they expected. This may include a home inspection, appraisal, and final loan approval.
During this time, the seller typically can`t accept any other offers or make any changes to the terms of the agreement without the buyer`s approval. If everything goes smoothly and the buyer is satisfied with the results of their due diligence, the sale will move forward and the house will officially be sold.
However, it`s important to note that a home being under contract doesn`t necessarily mean that the sale is guaranteed. There are a number of reasons why a sale might fall through, including issues with financing, problems uncovered during inspections, or changes in the seller`s circumstances. In these cases, the home will be placed back on the market and potential buyers will have the opportunity to make their own offers.
In conclusion, when a house is under contract, it means that a buyer and seller have entered into a legally binding agreement for the sale of the property. While this typically means that the home is off the market, there is still a chance that the sale could fall through. As a buyer or seller, it`s important to understand the implications of a home being under contract and to work closely with your real estate agent to navigate the process.