What Does under Contract Mean When Selling a House

When selling a house, you may hear the term “under contract” thrown around quite often. To put it simply, this means that the seller has accepted an offer from a buyer and both parties have signed a purchase agreement. However, there are several important details to understand about this process and what it means for all parties involved.

First, it`s important to note that just because a house is under contract, it doesn`t necessarily mean that the sale is a done deal. There are a few important contingencies that need to be met before the sale can be finalized. For example, the buyer may need to secure financing, complete a home inspection, or obtain certain documents from the seller. These contingencies are included in the purchase agreement and must be fulfilled before the sale can be completed.

Another important detail to understand is that when a house is under contract, the seller is typically prohibited from accepting any other offers from potential buyers. This is because the seller has entered into a legally binding agreement with the buyer and is obligated to sell the property to them, assuming all contingencies are met. However, in some cases, the purchase agreement may include a contingency that allows the seller to accept backup offers in case the initial sale falls through.

For the buyer, being under contract means that they are one step closer to owning the property. However, it`s important to note that during this period, they are still responsible for certain tasks and deadlines outlined in the purchase agreement. For example, the buyer may need to submit their earnest money deposit or complete a home inspection by a certain date. Failing to meet these deadlines could potentially put the sale at risk.

Finally, it`s worth noting that a house can remain under contract for varying lengths of time. In some cases, the contingencies can be fulfilled quickly and the sale can be completed within a matter of weeks. However, in other cases, issues may arise that can extend the process by several months. During this time, the property will typically remain off the market and the seller will be unable to accept any other offers.

In conclusion, when a house is under contract, it means that the seller has accepted an offer from a buyer and both parties have signed a purchase agreement. However, there are several contingencies that must be met before the sale can be finalized, and the property may remain off the market for an extended period of time. For both buyers and sellers, it`s important to understand the details of this process and work closely with their real estate agent to ensure a successful outcome.