What are the main steps involved in a real estate transaction that is ‘under contract’?

?

Introduction

When buying or selling a home, it is important to understand the terms used in real estate transactions. One of the most common terms is “under contract.” Understanding what this means can help buyers and sellers make informed decisions and avoid potential pitfalls.

What Does Under Contract Mean?

In real estate, “under contract” means that a buyer and seller have agreed to a purchase and sale agreement. This agreement outlines the terms of the transaction, including the price, closing date, and any other conditions that must be met before the sale is finalized. Once both parties sign the agreement, the property is considered “under contract.”

What Happens After a Property Is Under Contract?

Once a property is under contract, the buyer and seller will typically enter into a period of due diligence. During this period, the buyer will inspect the property and conduct any necessary research. The buyer may also negotiate for repairs or other concessions from the seller. Once all of the due diligence is completed, the buyer will typically obtain financing for the purchase.

Closing on a Property

Once all of the conditions of the purchase and sale agreement have been met, the buyer and seller will proceed to closing. At closing, the buyer will sign all of the necessary paperwork and pay any closing costs or other fees associated with the transaction. Once all of the paperwork is signed and all funds have been paid, the transaction is considered complete and the property is officially sold.

FAQs

Q: What does it mean when a property is under contract?

A: When a property is under contract, it means that a buyer and seller have agreed to a purchase and sale agreement. This agreement outlines the terms of the transaction, including the price, closing date, and any other conditions that must be met before the sale is finalized.

Q: What happens after a property is under contract?

A: After a property is under contract, the buyer and seller will typically enter into a period of due diligence. During this period, the buyer will inspect the property and conduct any necessary research. The buyer may also negotiate for repairs or other concessions from the seller. Once all of the due diligence is completed, the buyer will typically obtain financing for the purchase.

Q: What happens at closing?

A: At closing, the buyer will sign all of the necessary paperwork and pay any closing costs or other fees associated with the transaction. Once all of the paperwork is signed and all funds have been paid, the transaction is considered complete and the property is officially sold.

Conclusion

When buying or selling a home, it is important to understand what it means when a property is “under contract.” This term indicates that a purchase and sale agreement has been signed by both parties and that they are proceeding to closing. Understanding what this means can help buyers and sellers make informed decisions and avoid potential pitfalls.