What is what does it mean when a house is under contract?

When a house is under contract, it means that the seller has accepted an offer from a buyer to purchase the property, and both parties have signed a legally binding agreement. However, it's not a done deal yet! Several things need to happen before the sale is finalized and the house is officially sold.

Here's a breakdown of what "under contract" typically means:

• Acceptance of Offer: The seller has formally accepted the buyer's offer, including the price, closing date, and any contingencies.

• <a href="https://www.wikiwhat.page/kavramlar/Earnest%20Money">Earnest Money</a> Deposit: The buyer has usually put down an earnest money deposit, which is held in escrow and demonstrates their serious intent to purchase the house.

• <a href="https://www.wikiwhat.page/kavramlar/Contingencies">Contingencies</a>: The contract likely contains contingencies, which are conditions that must be met for the sale to proceed. Common contingencies include:

  • <a href="https://www.wikiwhat.page/kavramlar/Home%20Inspection">Home Inspection</a>: The buyer has the right to have the property inspected by a professional. If significant issues are found, they may be able to renegotiate the price or back out of the deal (depending on the contract terms).

  • <a href="https://www.wikiwhat.page/kavramlar/Appraisal">Appraisal</a>: The lender will order an appraisal to ensure the property is worth the loan amount. If the appraisal comes in lower than the purchase price, the buyer may need to renegotiate with the seller or come up with the difference in cash.

  • <a href="https://www.wikiwhat.page/kavramlar/Financing">Financing</a>: The buyer's ability to secure a mortgage is often contingent upon loan approval. If they are unable to obtain financing, they may be able to terminate the contract.

  • <a href="https://www.wikiwhat.page/kavramlar/Title%20Search">Title Search</a>: A title company will conduct a search to ensure the seller has clear ownership of the property and that there are no liens or other encumbrances.

• The Waiting Game: During this "under contract" period, both the buyer and seller are working towards fulfilling the terms of the contract. This involves completing inspections, securing financing, resolving any issues that arise, and preparing for the closing.

• Possible Outcomes: The sale can either successfully close (all contingencies are met, and the property is transferred to the buyer) or fall through (one or more contingencies are not met, and the contract is terminated). If the contract is terminated due to a contingency, the buyer typically gets their earnest money back.