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when a houses status is under contract what does that mean?

  • May 07 2012 - US
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Answers (6)

The term "under contract" means the buyer and seller must perform according to the offer or sale agreement terms and contingencies before the sale can be completed.   Another words, there is a good window of opportunity for other buyers to make and wait to see what transpires from the previous offer. 

If you have found your dream home but your a little late and the property is "under contract", the best thing to do is to have your realtor put in a strong back-up offer.  The more favorable terms in your sales agreement/offer, the higher your chances are!  Favorable terms can be matching the price of the house and even offering to purchase the home at a higher price than listed. Other easy terms are to have no other contingencies on our end.
 
A good back up offer, may increase your chances of being considered.  As a buyer, if you have your lender's loan approval letter and all the back up financial documents, you stand a much better chance of getting your desired home.  In today's market, if a house is priced right, there will be multiple offers in a short time.  Small inventory, low interest rates, shortage of homes in move-in condition and lower unemployment rates all contribute to this home buying  "craze", so be aware!

There is a good likelihood that despite an offer, the sale may not be completed. So don't hesitate to submit your offer right away without delay.

Matilda Asatoorian, M.B.A., Realtor
(serving La Canada, Pasadena, La Crescenta, Tujunga and Sunland)
Sotheby's International Realty
  • June 24 2014
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What in the situation a house is under contact and the seller
continue to have the house listed with knowledge the buyers 
intention is to assign the home to another entity and the 
house is listed for pricing lower that the contract assigner
has an offer for? Also seller has knowledge of the assigner
price? Is this fair practice?
  • November 15 2013
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A buyer has made an offer to purchase the home at a certain price and given certain terms but the home has not yet "closed".  There may or may not be contingencies that need to be considered such as financing, appraisal, and/or others but once these are met it is a much more solid bet that it will go to closing.  The other advisors below were right on as well.
  • May 07 2012
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There are typically four classifications in the home selling process.  I've briefly outlined them for you:
1) Active - Home is on the market, ready for showings
2) Contingent - (A.K.A. Under Contract) Offer has been accepted by sellers, home is still technically on the market so offers can be accepted per the sellers choice, sale is "contingent" upon buyer obtaining financing and completing a satisfactory inspection (these items are labeled as "the contingencies.")
3) Pending - All contingencies have been met or satisfied and both parties have agreed to move forward to closing.
4) Closed -  Transaction has been concluded with a successful closing and payment has been exchanged.

Hope this helps~

Jeff Metcalf
Watson Realty Corp.
  • May 07 2012
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It means both buyer and seller ar in agreement with regards to the terms and conditions of the sale and both are legally bound to go throught with the agreed terms. So they are going through the process of inspection, loan approval, appraisal title search and when all is done they will get to table and seal the deal if all is well.

Sometimes  something comes up that prevents the deal from closing, such as the inspection reveals defects and the buyer and seller disagree as to how to solve the new information, the property might not appraise the agreed sale value or the buyer cannot secure a loan. 

These are the most common reasons for a deal not making it to table to close.So if you like a property that is under contract place a watch on it to see if something happens.
best to you!
  • May 07 2012
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Under Contract means that there has been an offer submitted by a buyer to a seller. The seller has agreed to the terms and conditions of the offer.The house is not yet sold.  The buyer uses the time period between making the offer and purchase (closing) to perform all tasks of needed to complete the sale, such as: home inspection and loan conditions (appraisal, etc..).

Under contract does not mean that it is "off the market". If the seller likes, the house can still be shown and back up offers can be made and accepted by the seller. Many sellers will tell the agent that they do not want any additional showings as they work through the process with a buyer. Many agents will not show homes that are under contract as they are currently under obligation to another buyer.

Hope this helps.

  • May 07 2012
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