Buying a home can be a long, difficult process. But when you finally make an offer on a house and that offer is accepted, there’s a moment of jubilation, excitement and relief. Unfortunately, this isn’t the end of the home-buying process. You have simply entered a new phase known as “under contract.” But what does being under contract actually mean? And what more do you have to do to complete the purchase and finally own your home? Here’s what you can expect now that you are officially under contract.
What Does Being Under Contract Mean?
When a house is “under contract,” it means your official offer has been accepted, but the sale isn’t yet final. There are still several steps that need to happen before you can own your home outright, including loan processes, inspections, and depending on the results of those inspections, negotiations about home improvements or price changes.
What is Required to Complete the Transaction?
Once your offer is accepted, the next thing that will happen is the money you put in escrow, or your earnest money deposit, will be cashed. After that, both you and the seller will have to meet certain contingencies. These are stipulations built into the purchase agreement that protect both buyer and seller in case unforeseen problems come up either with your financing, or with the home itself. If either you or the seller fails to meet those conditions, the contract becomes void, and either of you has the right to back out of the sale.
What Are Some Common Home-Buying Contingencies?
The exact contingencies outlined in your purchase agreement will depend on what’s most important to both you and the seller. Here are some of the most common contingencies found in a home purchase agreement:
- Home appraisal
- Loan contingency
- Lead-based paint
- Home inspection
- Pest inspection
- Roof inspection
- Sewer inspection
- Radon, mold or asbestos inspection
- Private well inspection
- Preliminary title report
If any issues arise during the home inspection process, it can alter the nature of your purchase agreement. For example, if mold is discovered in the basement of the home, the seller could offer to have it professionally removed, or you could renegotiate a lower price for the home. If it’s something more serious, like structural issues or a problem with the title, you may just want to walk away from the deal altogether. Your real estate agent will be able to provide guidance on the best course of action, should any issues come up.
How Long Does It Take for a Sale to be Final?
Once a house is under contract, both buyer and seller have a specific amount of time to finish their requirements. Typically, it takes four to eight weeks to go from an accepted offer to closing day.
What if I Found My Dream House and It’s Already Under Contract?
If a property you are interested in is under contract, you may still have a chance to purchase it. If the buyer or seller cannot meet any of the contingencies in the purchase agreement, the house may go back on the market. The seller cannot, however, accept another offer that comes in after a home has been placed under contract. Even if that offer is for a larger amount.
So, you’ll just have to cross your fingers and hope that the deal falls through. But until the home has a “SOLD” sign, you are free to look online or drive by periodically to see if the “PENDING” sticker has come down.
Can I Submit an Offer on a House that is Already Under Contract?
You can place a backup offer just in case the house goes back on the market. If you choose to go that route, you may need to make a generous offer to make sure your offer is accepted. Contracts fall through for various reasons, so there’s always a chance of you getting the house you wanted.
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