Understanding the Concept
When a house is under contract, it means that the seller has accepted an offer from a potential buyer, but the sale has not yet been finalized. This stage is crucial in the home-buying process as it marks the beginning of negotiations and inspections.
What Happens During This Time?
During the period when a house is under contract, both parties work towards meeting the contingencies outlined in the contract. This typically includes the buyer obtaining financing, conducting a home inspection, and possibly selling their own home.
Why Is It Important?
Having a house under contract is a significant milestone for both buyers and sellers. For the seller, it means they have a potential buyer lined up, while for the buyer, it offers some security that the property will not be sold to someone else during this period.
Real-Life Examples
Consider this scenario: John puts in an offer on a house and after negotiations, the seller accepts. The house is now under contract, and John has a specific window of time to secure financing and complete inspections before closing the deal.
Case Studies
- Case Study 1: Sarah’s house was under contract for 30 days before the buyer’s financing fell through, resulting in the deal being terminated.
- Case Study 2: Tom’s house was under contract for two weeks, and after a successful home inspection, the sale closed without any issues.
Statistics
According to the National Association of Realtors, about 5% of home sales fall through after the contract is signed due to financing issues, inspection problems, or appraisal discrepancies.
