What does “under contract” mean in a real estate ad?

As you browse through the real estate listings, you might spot a few that say the house is “under contract”. But what does “under contract” mean?

In most cases, a property is listed as “under contract” after a buyer has made an offer and the seller has accepted. While this is a big step, it doesn’t mean the deal is done yet.

So if you see a home you like that is “under contract,” don’t give up just yet. Here’s how to handle this scenario and maybe even get the house.

What does “under contract” mean?

When a real estate ad is “under contract”, there are still contingencies related to that offer that must be cleared before closing, says Kelley ramirez, a Charles Rutenberg Realty realtor in central and southern Florida. These contingencies often include financing, a home inspection, a home appraisal, and sometimes the sale of the buyer’s current home.

Since it is possible for one of these items to break down along the way, sometimes the seller’s agents will accept backup offers. In other words, if you want this house for yourself, it could still happen.

“If a buyer were to find a home they love that is listed under a contingency contract, it certainly wouldn’t hurt for their agent to contact the seller’s agent with a backup offer, as long as the buyer understands that that the backup offer is only good if the current contract fails, ”says Ramirez.

What are your chances of seeing a contract fail? It depends on a number of factors, including the temperature of your local real estate market. The hotter the market, the less likely it is to collapse.

Hal Hovey, a realtor at Coldwell Banker Koetje Real Estate in Oak Harbor, WA, says that in his market, about 20% of contract sales do not end up being closed.

“In other words, the sales don’t end and the house is usually available for sale again,” he says.

However, Ramirez cautions buyers not to expect too much when it comes to bidding on properties already under contract.

“Most of the time, unforeseen events are taken care of without a problem and the sale is closed,” says Ramirez.

So how long do you have to wait to find out if you have a chance? Well, it might take a while. Hovey says it typically takes 30 to 45 days from the date an offer is accepted until the sales contract closes and the sale is completed.

“Under contract” versus “sale in progress”: what’s the difference?

Ramirez says that while the terms are often used interchangeably, there are differences between a home listed as “under contract” and “pending sale.” In most cases, “pending sale” means it’s almost a done deal, and you should probably look for another home.

“If a property is listed as ‘sale pending’ the contingencies have all been removed and the property is ready to close,” Ramirez said. “At this point, one would assume that it will close without a problem, and therefore to bid on this type of property would be a moot point.”

It is also important to note that these terms may vary by state and region. Your real estate agent can better help you understand where a particular home is in the sales process and what your chances are of buying it. Having said that, if this is truly your dream home, then don’t completely despair, as problems can arise, even though they’re unlikely, and until that last line is signed a sale isn’t. not a sale.

So if you see a home listed as “under contract,” you don’t necessarily have to exclude it.

Your chances of getting it won’t be as high as a home with an active “for sale” status, but it can’t hurt to make an offer or at least keep it on your radar until the final sale is concluded. .

The position What does “under contract” mean in a real estate ad? appeared first on Real Estate News & Insights | realtor.com®.

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