What Does Under Agreement Mean In Real Estate? Meaning & Example

What Does Under Agreement Mean In Real Estate? Meaning & Example

“Under agreement” or “under contract” in real estate refers to the stage where a seller has accepted an offer from a buyer to purchase a property. However, the home is not considered sold until all contingencies on the property are met and the ownership is transferred during the closing process.

This means that the deal can still fall through if the contingencies are not satisfied. Common contingencies include financing, home appraisal, home inspection, and home sale contingencies. It is important to understand that a property under agreement is not officially sold yet and backup offers may be considered in case the initial deal doesn’t go through.

Key Takeaways:

• “Under agreement” or “under contract” means a seller has accepted an offer from a buyer to purchase a property in real estate.
• The property is not considered sold until all contingencies are met and ownership is transferred during the closing process.
• Common contingencies include financing, home appraisal, home inspection, and home sale contingencies.
• A property under agreement is not officially sold yet and backup offers may be considered.
• Consult with a real estate agent to understand the contract implications for buyers and sellers when dealing with properties under agreement.

What Does It Mean When A House Is Under Contract?

When a house is under contract, it means that the seller has already accepted an offer from a buyer to purchase their home. However, until all contingencies on the property are met and ownership is transferred during the closing process, the deal can still fall through. This means that the property is not considered sold yet.

Backup offers may come into consideration if the initial deal doesn’t go through. It is important for buyers and sellers to understand the implications and potential risks involved when a house is under contract.

Understanding Contingencies in Under Contract Properties

Contingencies play a crucial role in the status of properties that are under contract. Common contingencies include financing contingency, home appraisal contingency, home inspection contingency, and home sale contingency. These contingencies allow buyers and sellers to back out of the contract if certain conditions are not met. It is important for both buyers and sellers to be aware of the specific contingencies and their implications.

A property under contract is different from a property that is pending sale. While under contract means that contingencies are still being addressed, pending sale means that the contingencies have already been cleared and the sale is likely to proceed. Buyers may still make offers on properties that are under contract, but they would usually be considered backup offers in case the initial deal falls through.

It is important to consult with a real estate agent to understand the contract implications for both buyers and sellers when dealing with properties that are under contract.

Understanding the meaning of a house being under contract is essential for both buyers and sellers in the real estate market. It signifies that a seller has accepted an offer, but the deal is not yet finalized. Contingencies must be satisfied, and the closing process must be completed before the property is considered sold.

Buyers should be aware that backup offers may be considered, and sellers should understand the potential risks involved. By consulting with a real estate agent and being knowledgeable about the specific contingencies and implications, both parties can navigate the under contract status with confidence.

Understanding Contingencies and Implications for Under Contract Properties

In the world of real estate, contingencies play a vital role in properties that are under contract. Contingencies are conditions that allow both buyers and sellers to back out of a contract if certain requirements are not met. These contingencies serve to protect the interests of both parties involved in the transaction.

Common contingencies include financing contingency, home appraisal contingency, home inspection contingency, and home sale contingency. The financing contingency ensures that the buyer is able to secure the necessary funds to purchase the property, while the home appraisal contingency ensures that the property is valued at a satisfactory amount.

The home inspection contingency allows the buyer to have a professional inspection of the property to identify any major issues, and the home sale contingency is applicable if the buyer needs to sell their own property in order to proceed with the purchase.

It is important for both buyers and sellers to be fully aware of these contingencies and their implications. Understanding the specific conditions and timelines associated with each contingency is crucial to navigate the under contract process successfully. Buyers should carefully review the contingencies to ensure they align with their needs and objectives, while sellers should be prepared to address any contingencies that may arise.

It’s important to note that a property under contract is different from a property that is pending sale. While under contract indicates that contingencies are still being addressed, pending sale means that the contingencies have been cleared and the sale is likely to proceed. However, buyers may still submit backup offers on properties that are under contract, in case the initial deal falls through.