When you see a “under contract” sign outside a house, it means that the seller has accepted an offer from a buyer but the sale has not yet been completed. This is a crucial stage in the home buying process and can be one of the most nerve-wracking times for both the buyer and the seller.
Under contract means that the seller has accepted an offer from a prospective buyer, and the buyer has provided a certain amount of earnest money as a deposit to show that they`re serious about the purchase. This earnest money is usually a small percentage of the total purchase price and is held in an escrow account until the sale is complete.
During this time, the buyer is given a certain amount of time to inspect the property and ensure that there are no hidden issues with the house. If the buyer discovers any issues, they can either negotiate with the seller to have the issues fixed or back out of the deal altogether.
The length of time a house is under contract can vary. It could be as short as a few days or as long as several weeks or months. During this time, the buyer’s lender will also be performing a title search and appraisal of the property to ensure that the sale price is fair and that there are no outstanding liens against the property.
It’s important to note that even though a house is under contract, it’s not a done deal. There are many reasons why a sale may fall through during this stage, such as issues with financing or disagreements over inspection results. If the sale does not go through, the house will be back on the market, and the seller will need to accept a new offer.
In conclusion, when a house is under contract, it means that a seller has accepted an offer from a buyer, but the sale has not been completed yet. This stage in the home buying process can be lengthy and nerve-wracking for both parties. It’s important to remember that even though a house is under contract, the sale is not guaranteed, and there are many reasons why a deal may fall through.