What Does it Mean When a Home is Under Contract?
If you’ve been actively searching for a home, then you’ve probably seen the term “under contract” or “pending” on a listing before.
But what does it mean? And does it rule the home out completely? That depends.
Generally, “under contract” means another buyer has put an offer on the home, and the seller has accepted. Though this indicates a sale is currently in progress, it doesn’t necessarily mean the house is off the market — at least not yet.
There’s Still a Chance
If you’re interested in an under-contract property, there might still be hope.
Here are three scenarios that could crop up — even after the seller has accepted an offer:
- Something comes up during the buyer’s home inspection. If the home inspection reveals issues with the property, the buyer will try to have them repaired or, at the very least, paid for by the seller. If they can’t negotiate a remedy for the repairs, the buyer might back out of the deal entirely.
- The home appraises for less than the buyer’s offer. If the appraisal doesn’t match the full amount the buyer has offered, then they’ll be on the hook to make up the difference. If their finances won’t allow for this, they may be forced to back out of the transaction.
- The financing falls through on the first deal. If the buyer’s financing falls through (the buyer’s loan isn’t approved, they lose their job, etc.), they will likely be unable to follow through with the purchase.
If any of these situations occur, the home will either be re-listed, or the sellers will revert to a back-up offer. They may also reach out to other offers that were on the table at one point in time.
The Bottom Line
If you like a property that’s currently under contract, then talk to your real estate agent first. If the seller is accepting back-up offers, they can put one in on your behalf in case the first offer falls through. If the seller is not taking back-ups, they can at least let the listing agent know of your interest. Then, if something happens to derail offer No. 1, you’ll be first in line to hear about it.
In the event the home does get re-listed, make sure you pull out all the stops to impress the seller. Come Approved to Move™ to give them confidence in your offer and financing, and include an offer letter to make a direct, personal appeal. Get in touch to start your mortgage application today.