What Is under Contract Mean in Real Estate

As the world of real estate continues to evolve, it’s important to understand the language and terminology used throughout the industry. One term that you may come across in your search for a new home is “under contract.”

So, what does under contract mean in real estate?

When a property is listed for sale, interested parties can make an offer to purchase the home. If the seller accepts the offer, the property is considered to be “under contract.” This means that the seller has accepted the terms of the offer and is legally bound to sell the property to the buyer if the conditions of the contract are met.

The contract will outline important details such as the purchase price, financing terms, and any contingencies that must be fulfilled before the sale can be completed. Common contingencies include home inspections, appraisal, and financing.

Once a property is under contract, it is no longer available for sale to other potential buyers. However, until the sale is finalized and the contract is fully executed, the property is still technically on the market.

During the period of time that the property is under contract, the buyer will typically conduct inspections, finalize financing, and work with their real estate agent to ensure that all conditions of the contract are met. If any issues arise during this process, the buyer and seller may need to negotiate modifications to the contract in order to move forward with the sale.

It’s important to note that there is a difference between “under contract” and “sold.” A property that is under contract may still fall through if the buyer is unable to secure financing or if issues arise during the inspection process. Until the sale is fully completed and the transaction is closed, the status of the property is still considered to be under contract.

In conclusion, understanding the term “under contract” is crucial when navigating the real estate market. If you’re in the process of buying or selling a home, it’s important to work with a knowledgeable real estate agent who can guide you through the process and ensure that all conditions of the contract are fulfilled.