Dream Meanings - Awakening From CORE

When a house is labeled as "under contract," it means that a pivotal milestone in the real estate transaction journey has been reached. At this stage, the seller has accepted an offer from a prospective buyer. Introduction Have you ever come across the term "under contract" when exploring the real estate market? If you're not familiar with the ins and outs of buying or selling a house, this phrase may sound perplexing at first. But fear not! In this article, I'll unravel the mystery behind what it truly means when a house is under contract. Whether you're a potential buyer, seller, or simply curious about the process, understanding this concept is essential. Let's dive in and explore the fascinating world of real estate transactions. What Does It Mean When a House Is Under Contract? When a house is labeled as "under contract," it means that a pivotal milestone in the real estate transaction journey has been reached. At this stage, the seller has accepted an offer from a prospective buyer. However, it's important to note that the deal isn't finalized just yet. The property remains under contract until all the contingencies stipulated in the agreement are met, and ownership officially transfers to the new homeowner during the closing process. The "under contract" status is an indication that the property is off the market for the time being, and the seller has committed to selling it to the buyer who made the accepted offer. Nevertheless, it's not a done deal until the contingencies are cleared and the closing process is successfully completed. According to LendingTree, in the realm of real estate, a property is considered "under contract" when both the buyer and seller have officially signed a legal document to initiate the home purchase process. This signifies a significant step towards completing the transaction. According to Quicken Loans, being "under contract" implies that the seller has approved an offer for the property, though the sale is not yet finalized. The deal hinges on meeting all stipulated contingencies, ensuring a smooth transaction. As per Opendoor, the term "Pending" indicates that a home is under contract, with all necessary conditions met to proceed with the closing of the deal. Pending listings typically do not entertain backup offers. Realtor.com explains that when a real estate listing states "under contract," it signifies that a buyer has made an offer that the seller has accepted. However, there may still be opportunities for other prospective buyers to engage in the process. What's the Difference Between Pending and Under Contract? In real estate, the terms "pending" and "under contract" are often used interchangeably, which can lead to confusion. However, there is a subtle difference between the two that's worth understanding. Under Contract: As explained earlier, when a house is under contract, it means that the seller has accepted an offer from a buyer, and both parties have signed a contract. The sale is in progress, but it is not yet finalized. Pending: A property is labeled as "pending" when it has an accepted offer, but there are still contingencies and conditions that need to be met before the sale can proceed. Essentially, "pending" is a subcategory of "under contract." It implies that the deal is in motion, but there are outstanding requirements to fulfill. In essence, all properties that are under contract are also pending, but not all pending properties are under contract. The Basics of a Real Estate Transaction Before delving into the meaning of a house being under contract, it's important to grasp the basics of a real estate transaction. When a property is listed for sale, potential buyers express their interest by making offers. These offers outline the proposed price, terms, and conditions of the purchase. Once an offer is accepted, the process of buying or selling a house begins. Making an Offer: The First Step When you find a house that captivates your interest, it's time to make an offer. But what happens after you submit your offer to the seller? Let's break it down step by step: 1. Offer Submission After carefully considering the house's features and conducting thorough research on its market value, you're ready to make an offer. You submit your offer, usually in writing, to the seller or their real estate agent. The offer includes details such as the purchase price, desired closing date, financing terms, contingencies, and any additional conditions you want to include. 2. Seller's Response Once the seller receives your offer, they have several options. They can accept the offer as it stands, reject it outright, or make a counteroffer. In a counteroffer, the seller proposes modifications to the terms and conditions you initially proposed. Negotiations may go back and forth until both parties reach a mutually acceptable agreement. 3. Acceptance of the Offer When the seller accepts your offer, congratulations! You've cleared a significant hurdle in the home-buying process. However, it's important to note that acceptance alone does not mean the house is officially under contract. Understanding the Under Contract Status When a seller accepts an offer, the house is considered "under contract." This term signifies that both the buyer and seller have agreed on the terms and conditions of the sale, but the process is not yet complete. Let's explore what this status entails: 1. Legally Binding Agreement Once a seller accepts an offer, a legally binding agreement is formed between the buyer and seller. This agreement outlines the terms of the transaction and serves as a contract. It typically includes details such as the purchase price, financing arrangements, contingencies, and the expected closing date. 2. Contingencies and Due Diligence Most real estate contracts include contingencies that allow the buyer to perform due diligence on the property. Common contingencies include a home inspection, appraisal, and financing contingency. These contingencies provide the buyer with an opportunity to ensure the property meets their expectations and that they can secure adequate financing. If any issues arise during the due diligence period, the buyer may have the option to renegotiate the terms, request repairs, or even withdraw from the contract. 3. Earnest Money Deposit As part of the contract, the buyer is often required to provide an earnest money deposit. This deposit demonstrates the buyer's commitment to the transaction. It is typically held in escrow and will be applied towards the down payment or closing costs at the time of closing. 4. Property Status and Marketing When a house is under contract, it is generally no longer actively marketed. The seller's real estate agent will typically update the listing to indicate that the property is "under contract" or "pending." However, it's important to note that the status may vary depending on local real estate practices. Does Under Contract Mean Sold? No, "under contract" does not necessarily mean that a house is sold. It indicates that the property is in the process of being sold, with an accepted offer and a signed contract. However, the sale is not considered complete until all the contingencies have been satisfied, and the closing process has been successfully executed. During the time a property is under contract, there is still a possibility that the deal may fall through. This could happen for various reasons, such as issues arising during inspections, financing complications, or disagreements between the buyer and seller. Until the property officially changes ownership at the closing table, it is not considered "sold." Can You Make an Offer on a House That Is Active Under Contract? Typically, once a house is under contract, it is no longer open to offers from other potential buyers. The seller has committed to the accepted offer, and the property is effectively taken off the market, at least temporarily. However, there are exceptions to this rule. In some cases, a property may be listed as "under contract with a contingency." This means that the initial offer has been accepted, but certain conditions or contingencies must be met before the deal can proceed to closing. During this period, it is possible for another buyer to submit a backup offer, which would become the primary offer if the initial contract falls through. It's important to note that the acceptability of backup offers varies by location and is subject to negotiation between the seller and their real estate agent. Can You Still Make an Offer on a Pending House? A "pending" status indicates that a property has an accepted offer, but it is not yet finalized. While the property is pending, it is technically still possible for other potential buyers to submit backup offers. If the primary contract encounters difficulties or falls through due to contingencies not being met, the seller may consider backup offers as potential replacements. Similar to making an offer on a house under contract, the acceptance of backup offers on a pending property is contingent on various factors, including local real estate practices and the preferences of the seller and their agent. Is Pending the Same as Sold? No, "pending" is not the same as "sold" in real estate. These terms represent different stages in the home buying process: Pending: A property is labeled as "pending" when an offer has been accepted, but the sale is not yet finalized. There are still steps to be taken, contingencies to be met, and the closing process to complete. Sold: A property is considered "sold" when all the necessary steps have been completed, and ownership of the property has officially transferred from the seller to the buyer. This includes satisfying all contingencies, securing financing, and completing the closing paperwork. In summary, a property is labeled as "pending" during the intermediate stages of the sale, while it is only considered "sold" once the entire process is successfully concluded. What Comes First: Pending Sale or Under Contract? In most cases, "under contract" comes before a property is labeled as "pending." When a seller accepts an offer from a buyer, the status is typically changed to "under contract." This signifies that the parties have agreed to the terms of the sale, but it is not yet finalized. Once the contingencies are cleared, and all the necessary conditions are met, the status is updated to "pending." This indicates that the sale is in its final stages and is awaiting completion through the closing process. In essence, "under contract" precedes "pending" in the sequence of events during a real estate transaction. What Does It Mean on Zillow When It Says Under Contract? Zillow, a popular online real estate marketplace, uses various status labels to provide information about the availability and status of properties listed on its platform. When a property is labeled as "under contract" on Zillow, it means that the seller has accepted an offer from a buyer, and a contract has been executed. However, as with the general real estate industry, the term "under contract" on Zillow signifies that the sale is in progress but not yet finalized. The property is no longer actively available for offers from other potential buyers. Instead, it is in the process of satisfying contingencies and moving towards the closing stage. Buyers and agents using Zillow can find detailed information about the property's status and the specific terms of the contract by reviewing the property listing. Does Pending Always Mean Sold? No, a "pending" status does not always mean that a property is sold. As previously explained, "pending" indicates that an offer has been accepted, but the sale is not yet complete. There are still steps and conditions to be fulfilled before the property can be considered "sold." Until all contingencies are satisfied, financing is secured, and the closing process is successfully executed, the property remains in the "pending" status. It is only after these steps have been completed that the property is officially considered "sold." Is Contingent the Same as Under Contract? While "contingent" and "under contract" are related terms in the real estate lexicon, they are not identical. Both statuses indicate that an offer has been accepted, but they differ in their implications. Under Contract: When a property is under contract, it means that the seller has accepted an offer from a buyer, and a contract has been signed. However, the sale is not yet finalized, as there may still be contingencies and conditions to meet. Contingent: A property labeled as "contingent" typically indicates that specific contingencies or conditions are attached to the offer. These conditions must be met for the sale to proceed. Common contingencies include inspections, financing approval, or the sale of the buyer's current home. In essence, "contingent" is a subset of "under contract." A property can be under contract with or without contingencies, but when contingencies are present, the sale is contingent upon meeting those conditions. Is Pending Further Along Than Contingent? In the hierarchy of real estate statuses, "pending" is generally considered further along in the sales process than "contingent." Here's why: Contingent: When a property is labeled as "contingent," it means that certain conditions or contingencies are attached to the offer. These conditions need to be met before the sale can proceed. Common contingencies include inspections, appraisal, and financing approval. Until these contingencies are resolved, the sale remains in limbo. Pending: A property that is "pending" has usually cleared all contingencies and is in the final stages of the sales process. At this point, the deal is nearly complete, with only the closing process remaining to officially transfer ownership from the seller to the buyer. The Role of Time in a Real Estate Transaction Real estate transactions involve several stages, and timing is crucial at each step. Let's explore the different timeframes that come into play when a house is under contract: 1. Due Diligence Period After the contract is signed, the buyer typically has a specified period, known as the due diligence period, to conduct inspections, appraisals, and any other necessary investigations. This timeframe allows the buyer to ensure the property meets their expectations and satisfies their financing requirements. The length of the due diligence period can vary but is usually around 10 to 14 days. 2. Financing and Appraisal During the under contract phase, the buyer must secure financing for the purchase. This involves completing a mortgage application, providing necessary documentation to the lender, and undergoing the appraisal process. The lender will assess the value of the property to ensure it aligns with the purchase price and serves as sufficient collateral for the loan. 3. Closing Process Once all contingencies have been satisfied, and financing is in place, the closing process can commence. Closing is the final step in a real estate transaction, where legal ownership of the property transfers from the seller to the buyer. It involves the review and signing of various documents, the payment of closing costs, and the transfer of funds. The specific timeframe for closing can vary but is typically within 30 to 45 days from the date the contract is executed. What Happens if the Contract Falls Through? While being under contract signifies a significant step toward completing a real estate transaction, it doesn't guarantee a successful closing. Various circumstances can lead to a contract falling through. Let's explore a few scenarios: 1. Contingency Not Met If the buyer's due diligence reveals significant issues with the property or if they are unable to secure financing, they may choose to exercise a contingency and terminate the contract. In such cases, the buyer can typically withdraw from the agreement without any penalties and may be entitled to a refund of their earnest money deposit. 2. Failure to Perform Both buyers and sellers have responsibilities outlined in the contract. If one party fails to fulfill their obligations, it can lead to the contract being terminated. For example, if the seller fails to make necessary repairs as agreed upon, the buyer may have the right to cancel the contract. 3. Mutual Agreement In some cases, the buyer and seller may mutually agree to cancel the contract. This can happen if unforeseen circumstances arise, such as a change in the buyer's financial situation or the seller's inability to find a suitable replacement property. How Long Can a House Be Under Contract? The duration of time that a house remains under contract can vary depending on several factors. Let's explore the different variables that can influence the length of time a house stays under contract: 1. Negotiations and Contract Terms The negotiation process between the buyer and seller plays a significant role in determining the length of time a house is under contract. It can take several days or even weeks for both parties to reach a mutually acceptable agreement on the terms and conditions of the sale. This negotiation period is typically included in the contract timeline. 2. Due Diligence Period Once the contract is signed, the buyer usually has a specified period, known as the due diligence period, to conduct inspections, appraisals, and any other necessary investigations. The length of this period can vary but is typically around 10 to 14 days. The buyer may request an extension if further inspections or assessments are required, which can extend the time the house is under contract. 3. Financing and Mortgage Approval Securing financing is a crucial step in the homebuying process. The buyer needs to complete a mortgage application, provide necessary documentation, and undergo the lender's approval process. This can take several weeks, depending on the lender's efficiency and the complexity of the buyer's financial situation. The house will remain under contract during this period until the buyer's financing is finalized. 4. Closing Process The closing process typically takes place within 30 to 45 days from the date the contract is executed. However, unforeseen circumstances or complexities in the transaction can cause delays, resulting in a more extended period under contract. Factors such as title issues, legal complications, or difficulties coordinating schedules between the buyer, seller, and other parties involved can contribute to a longer contract timeline. 5. Contingencies and Extensions The presence of contingencies in the contract can also impact the duration of time a house remains under contract. If the buyer requests repairs or renegotiates terms based on inspection findings or financing concerns, it can prolong the contract period. Additionally, both parties may agree to extensions if needed to address any outstanding issues or complete necessary tasks. In summary, the duration of time a house is under contract can vary based on negotiation timelines, due diligence periods, financing processes, and the overall efficiency of the transaction. It is important for both buyers and sellers to be flexible and prepared for potential delays during this phase. What Happens When a House Is Under Contract? When a house is under contract, several significant events and processes occur. Let's explore what happens during this phase: 1. Property Status and Marketing When a house is under contract, it is typically no longer actively marketed. The seller's real estate agent will often update the listing to indicate that the property is "under contract" or "pending." However, the specific terminology used may vary depending on local real estate practices. While the house is technically off the market, it is still possible for interested parties to submit backup offers, which would be considered in the event that the current contract falls through. 2. Legally Binding Agreement Being under contract means that a legally binding agreement exists between the buyer and seller. The terms and conditions of the sale, including the purchase price, financing arrangements, contingencies, and expected closing date, are outlined in the contract. Both parties are obligated to fulfill their respective responsibilities as defined in the agreement. 3. Due Diligence and Contingencies The buyer typically has a specified period, known as the due diligence period, to conduct inspections, appraisals, and other necessary investigations on the property. During this time, the buyer may identify issues or concerns that could affect their decision to proceed with the purchase. If contingencies are included in the contract, such as a financing contingency or repair contingency, the buyer may have the option to negotiate repairs, request changes to the terms, or even terminate the contract if certain conditions are not met. 4. Earnest Money Deposit As part of the contract, the buyer is usually required to provide an earnest money deposit to demonstrate their commitment to the transaction. The earnest money is typically held in an escrow account and will be applied towards the down payment or closing costs at the time of closing. If the contract falls through due to a breach by the buyer, the seller may be entitled to a portion or all of the earnest money deposit as liquidated damages. 5. Ongoing Communication and Cooperation During the contract period, the buyer, seller, and their respective real estate agents will continue to communicate and cooperate to ensure the smooth progression of the transaction. This includes providing necessary documentation, scheduling inspections and appraisals, addressing any contingencies or requests for repairs, and working towards a successful closing. It's important to note that while being under contract is a significant step towards completing the sale, it does not guarantee a successful closing. Various circumstances can arise that may cause the contract to fall through, which we'll explore in more detail in a later section. Does Under Contract Mean Sold? The term "under contract" does not necessarily mean that a house is sold. While being under contract is a significant milestone in the homebuying process, it does not signify the completion of the transaction. Instead, it indicates that the buyer and seller have reached an agreement on the terms and conditions of the sale, and the process is moving forward. The sale is considered complete when the closing process is finalized, and legal ownership of the property transfers from the seller to the buyer. This typically occurs at the closing table, where all necessary documents are signed, funds are exchanged, and the title is transferred. Until the closing process is complete, there is still a possibility for the contract to fall through or for unforeseen circumstances to arise that may prevent the sale from proceeding. Therefore, it is essential to fulfill all obligations and meet all conditions outlined in the contract to ensure a successful closing. Under Contract Meaning When a house is under contract, it means that a legally binding agreement has been established between the buyer and the seller. Both parties have agreed upon the terms and conditions of the sale, including the purchase price, financing arrangements, contingencies, and closing date. Being under contract signifies a significant step towards completing the real estate transaction. During the under contract phase, the buyer typically has a due diligence period to conduct inspections, appraisals, and other necessary investigations. This period allows the buyer to ensure the property meets their expectations and that any contingencies are satisfied. The seller, on the other hand, is obligated to cooperate with the buyer's due diligence efforts and address any agreed-upon repairs or requests. While under contract, the buyer and seller are bound by the terms of the agreement and must fulfill their respective responsibilities. The buyer must secure financing, complete all necessary inspections, and satisfy any contingencies. The seller must cooperate with the buyer's due diligence efforts, address agreed-upon repairs, and prepare for the closing process. It's important to note that the specific details and conditions of being under contract can vary depending on local real estate practices and the terms outlined in the contract itself. Consulting with a qualified real estate professional can provide further clarification on the under contract meaning within your specific jurisdiction. Under Contract vs. Pending In the realm of real estate, the terms "under contract" and "pending" are often used interchangeably to signify that a property has an accepted offer and is in the process of closing. However, in some regions or MLS systems, there may be a distinction between the two terms. Let's explore the potential differences: 1. Under Contract When a house is under contract, it typically means that the buyer and seller have agreed upon the terms and conditions of the sale, and a legally binding agreement exists between them. The property is no longer actively marketed, and it is considered to be in the contract phase. However, certain contingencies, such as inspections or financing, may still need to be satisfied before the sale can proceed. 2. Pending The term "pending" is often used synonymously with "under contract" to signify that a property has an accepted offer and is in the process of closing. In some regions or MLS systems, "pending" may indicate that all contingencies have been satisfied, and the sale is moving towards completion. It suggests that the property is closer to the final stages of the transaction compared to being under contract. It's essential to understand that the usage of these terms may vary depending on local real estate practices and MLS guidelines. Real estate professionals and agents in your area can provide more specific information on how these terms are used and interpreted in your market. Can a House Under Contract Fall Through? Yes, a house under contract can fall through, and the contract can be terminated under certain circumstances. While being under contract signifies progress towards closing the transaction, various factors can cause the contract to fall through. Let's explore some common scenarios: 1. Contingencies Not Met If the buyer's due diligence reveals significant issues with the property or if they are unable to secure financing within the agreed-upon timeframe, they may choose to exercise a contingency and terminate the contract. Contingencies provide the buyer with the option to withdraw from the contract without any penalties if certain conditions are not met. Common contingencies include home inspections, appraisals, and financing approval. 2. Failure to Perform Both buyers and sellers have obligations outlined in the contract. If one party fails to fulfill their responsibilities or breaches the terms of the agreement, it can lead to the contract being terminated. For example, if the seller fails to make necessary repairs as agreed upon, the buyer may have the right to cancel the contract. 3. Mutual Agreement In some cases, the buyer and seller may mutually agree to terminate the contract. This can occur if unforeseen circumstances arise, such as a change in the buyer's financial situation or the seller's inability to find a suitable replacement property. When both parties agree to cancel the contract, they can do so through a mutual release, absolving each other of further obligations. It's important to note that if the contract falls through, the house may be placed back on the market, and the seller can consider other offers. Therefore, it's crucial for both buyers and sellers to diligently fulfill their obligations and communicate openly throughout the under contract period to minimize the likelihood of the contract falling through. House Under Contract Still Listed as Active In some cases, you may come across a situation where a house is under contract but still listed as active. While it may seem contradictory, there can be valid reasons for this: 1. Backup Offers Even when a house is under contract, some sellers or real estate agents may choose to continue marketing the property as "active" to solicit backup offers. Backup offers serve as a contingency plan in case the current contract falls through. If the seller receives a backup offer that is more favorable or if the current contract is terminated, they can proceed with the backup offer instead. 2. Contingencies Not Yet Cleared Another reason for a house to be under contract but still listed as active is when certain contingencies in the contract have not been fully satisfied. For example, if the buyer is still in the process of completing inspections, appraisals, or obtaining financing approval, the seller may choose to keep the listing active until all contingencies are cleared. 3. Contract Pending Release In some cases, a house may be under contract, but the seller and buyer are in the process of negotiating a release from the contract. This negotiation could be due to various factors, such as changes in circumstances or unresolved issues. During this period, the house may still appear as active until the release is finalized. It's important to understand that the specific practices and guidelines regarding the status of listings can vary depending on the local real estate market and MLS regulations. Consulting with a real estate professional or agent can provide clarity on why a house may be under contract but still listed as active in your specific situation. Under Contract vs. Contingent The terms "under contract" and "contingent" are often used in real estate transactions, and while they share some similarities, they have distinct meanings. Let's explore the differences between these two terms: 1. Under Contract When a house is under contract, it means that a legally binding agreement has been established between the buyer and the seller. The terms and conditions of the sale have been agreed upon, and both parties are obligated to fulfill their respective responsibilities as outlined in the contract. The house is considered to be in the contract phase, and the transaction is progressing towards closing. 2. Contingent On the other hand, when a house is listed as contingent, it typically means that the buyer has made an offer, and the seller has accepted it, but certain contingencies must be met for the contract to proceed. These contingencies may include inspections, appraisals, financing approval, or the sale of the buyer's current home. The house is not yet under contract but is in a phase where specific conditions must be satisfied. In summary, "under contract" indicates that a legally binding agreement exists, while "contingent" suggests that the contract is subject to certain conditions being met. Once all contingencies are cleared, the status may change from contingent to under contract. The usage of these terms may vary depending on local real estate practices and MLS guidelines. It's important to consult with a real estate professional or agent in your area for a clear understanding of how these terms are used and interpreted in your specific market. Conclusion Now that you understand what it means when a house is under contract, you can navigate the world of real estate transactions with confidence. Remember, being under contract is a significant milestone, but it's essential to complete all necessary due diligence and meet all contingencies to ensure a successful closing. Whether you're a buyer or seller, this knowledge will empower you to make informed decisions and navigate the exciting journey of buying or selling a home. Happy house hunting!