What Does Under Contract Mean in Real Estate?
When buying a house, you probably search every website and attend open houses until you find the one you love. The buyer has strict viewing restrictions and isn’t willing to waste time on homes that don’t meet their requirements. What does under contract mean in real estate? Read on to learn more. Listed below are some ways to avoid being stuck in a contract indefinitely. And don’t forget to make a back-up offer.
Contingency clauses protect buyers
Buyers should make sure they are protected by contingency clauses in real estate contracts. These clauses protect both the seller and buyer. Mortgage contingencies, for example, require that the buyer secure a mortgage before submitting a purchase offer. In addition, an inspection contingency requires the buyer to have a professional home inspection. If a home inspection finds problems, the buyer can renegotiate the price or even back out of the contract. Although a contingency clause in a real estate contract can protect the buyer, it can also be a deal breaker. To avoid this, make sure you talk with an experienced real estate agent about your options.
A contingency clause gives the buyer valuable legal protection, but it’s important to keep the clauses simple. A seller may have several offers and may not need every one of them. With that in mind, a buyer who doesn’t add special requests may have an advantage. Using a contingency clause protects buyers from losing their earnest money if the home doesn’t sell, and may give the seller the luxury of choosing among multiple offers.
Listing a home while it is under contract
If you’re in the process of selling your house, you may have questions about how to list a home while it is under contract in a real estate transaction. In most cases, you’re locked into the deal once a buyer makes an offer on your house. If the buyer backs out, the seller can walk away from the sale. The seller can only accept a backup offer if the first buyer fails to meet his or her obligations.
In Texas, a pending listing is a conditional sale. The buyer can still withdraw from the deal if he or she finds something wrong during due diligence. In Texas, there are three types of contingent listings:
Making a back-up offer
Occasionally, it is possible to find a better home in a better location or for less than the first buyer was willing to pay. If a backup contract is made, the home buyer is legally obligated to purchase the other property. However, this process should be handled carefully. There are legal ramifications for making a back-up offer, so it is important to understand them before going ahead.
In some real estate markets, it may be wise to lock in a deal before it is too late. If the home sells fast, a relisting could ignite a bidding war that could boost the price. A backup offer, on the other hand, provides a seller with peace of mind and leverage. In these situations, a back-up buyer should ask himself whether he is comfortable with the risk of losing out on the home.