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As you peruse real estate listings, you may come across properties labeled as ‘under contract.’ This designation indicates that a buyer has successfully made an offer and the seller has accepted it. However, it’s crucial to understand that this status does not guarantee the sale will be finalized; several conditions still need to be met before the transaction is completed. By grasping the implications of this status, you can navigate the real estate market with greater confidence and understanding.

If you find a property you’re interested in that is currently “under contract,” there may still be an avenue for you to secure it. Here’s a deeper dive into this situation and how to navigate it effectively.

The Basics of ‘Under Contract’

When a property is listed as “under contract,” it indicates that the initial stages of the sale are in progress, but there are still contingencies that must be addressed. These contingencies can cover a range of factors, including:

Financing Approval: The buyer must secure a mortgage or other financing options.

Home Inspections: The property usually undergoes inspections to identify potential issues.

Appraisals: The property’s value must be confirmed to ensure it is worth the agreed purchase price.

Sale of Buyer’s Current Home: In some cases, the buyer may need to sell their existing home before purchasing.

Until these conditions are fully resolved, the deal remains precarious. Consequently, the seller’s agent may be open to accepting backup offers. If you’re interested in the property, submitting a backup offer could strategically position you as a potential buyer should the current deal fall apart.

Call us at 847-944-9400 to speak with one of our real estate attorneys today or request a case evaluation below! A real estate attorney can provide crucial legal advice and ensure all necessary paperwork is in order, especially when dealing with ‘under contract’ properties.

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Understanding Backup Offers

Submitting a backup offer can be advantageous, especially if interested in the property. However, it’s realizing that a backup offer will typically only be considered if the primary contract falls through is vital. Therefore, while it may not secure the home immediately, it keeps you in the running if unforeseen complications arise during the closing process.

Likelihood of a Contract Falling Through

The probability of a contract failing hinges on several variables, including market conditions and the nature of the contingencies involved. In hot real estate markets, where demand outstrips supply, deals are less likely to fall apart as buyers generally align with sellers more closely. However, industry statistics reveal that roughly 20% of contracts do not result in a closed sale, allowing properties to return to the market.

Prospective buyers must understand that while many deals proceed smoothly, there is always a risk of complications, particularly if the buyer relies on selling their current home or if significant issues arise during inspections. Being aware of these potential risks is a key part of navigating the real estate market.

Timeline for Contract Closure

Once an offer is accepted, the typical timeframe to close a sale ranges from 30 to 45 days. During this period, the buyer and seller work to resolve all contingencies, finalize financing, and prepare for the transfer of ownership. Each real estate transaction may differ, so be prepared for potential delays or extra steps based on the specific circumstances of the deal.

‘Under Contract’ vs. ‘Sale Pending’

It’s essential to differentiate between “under contract” and “sale pending” as these terms, though sometimes used interchangeably, represent distinct sales process stages. “Sale pending” usually indicates that all contingencies have been satisfied, and the property is nearing the final closing stage. At this point, the likelihood of the deal falling through is significantly reduced, making the potential for backup offers less relevant.

Real estate terminology may also vary by state or region, so it’s advisable to consult with a local real estate professional who can clarify the specifics of a property’s status in the sales process. A real estate professional can provide valuable insights, negotiate on your behalf, and ensure you understand all aspects of the transaction.

Need assistance navigating real estate transactions? Contact Gardi, Haught, Fischer, and Bhosale at 847-944-9400 for expert legal advice!

Just because a home is listed as “under contract” doesn’t mean it should be dismissed from your list of potential properties. While the chances of securing it may be lower compared to homes still on the market, expressing your interest or pursuing a backup offer could still prove worthwhile. Engaging actively in the real estate market ensures you remain aware and prepared to act should the opportunity arise.

Thinking of making a move in real estate? Reach out to Gardi, Haught, Fischer, and Bhosale at 847-944-9400 for dedicated support every step of the way! Request a Case Evaluation below.

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