You've decided to buy a home and whether it's your first home or your tenth you're likely to stumble across homes that are listed as 'under contract' on the real estate listing. Homes under contract in real estate mean there is a contract on the home and is pending sale OR the home is listed as contingent - Both have differences in their meaning. At some point during the house-hunting process, you've no doubt stumbled upon a listing that at first glance seems too good to be true.
The photos look amazing. The house meets every last one of your specifications. The school district is great and the neighborhood has a lot to offer. Then, you look at the status and that other shoe finally has a chance to drop: it's "under contract.
As you search for that home of your dreams on various real estate websites, you'll likely encounter a wide range of different statuses depending on the listing. There are many things that take place once you go under contract on a home. But what does "under contract" actually mean in a deeper sense, and how will it impact your ability to put an offer on this particular property?
To get answers to those questions, you must first understand more about how the sales and closing process actually works. When a buyer makes an offer on a prospective house, they typically work directly with their own real estate agent to come up with an appropriate offer and present their preapproval letter showing they are capable of purchasing the home.
Based on this, the agent will create what is called an "offer letter" or "offer to purchase and contract" to send to the seller's agent. There are many things buyers need when buying a house and anything can go wrong during the purchase process, though 'under contract' all starts with the seller's acceptance of the buyer's offer. This letter will detail a few key things, including price, which is obviously the most important element in any financial transaction as large as this one. If it's currently a buyer's market, the buyer usually submits an offer that is below the asking price to see if it gets accepted.
If it's a seller's market, they may submit one higher than the asking price as the chances that the property has seen multiple offers is high.
This offer letter will also include a discussion of closing costs, which can get complicated depending on the circumstances. If it's a seller's market, this is when a buyer may offer to pay for part of the seller's closing costs in an effort to really make their pitch stand out. If it's a buyer's market, the seller could essentially do the exact same thing to try to get their property off the market as quickly as possible.
At this point in the offer letter, a buyer will also include what is referred to as "earnest money," which is really just a good faith deposit to let the seller know how serious they are.
At this stage, the contract has been executed due to its required conditions being met. It is still possible for a deal in this situation to fall through, usually due to a home inspection or financing issues. However, it is much less common. Some real estate agents may not be willing to accept offers on homes where a sale is pending.
Still, there is no harm in asking, as there is no legal barrier to making an offer on a house until the sale is final. Our expert real estate specialists can guide you through the entire home-buying journey and will work to save you money along the way. Want to save money on your next home sale or purchase? Register with Homes for Heroes today and see why we offer the largest savings of any similar national program.
When you make a purchase offer on a home, make sure you fully understand all of the conditions specified in your contract.
Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Skip to content. What is Required to Complete the Transaction? The hotter the market, the less likely it is to fall through. However, Ramirez cautions buyers not to get their hopes up too high when it comes to putting in offers on properties that are already under contract.
So how long do you have to wait to find out if you have a shot? Well, it could take a while.
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