Are you wondering what does it mean when you’re under contract for a house? It can seem like a confusing process to buy a house, but knowing what’s happening will help you feel confident during your home-buying experience.
Knowing the signs that you’re under contract can give you peace of mind during your home-buying process. Knowing what to expect during the home-buying process will also help you get ready for when you reach the closing table.
This article will explain what it means when you’re under contract to buy a house. Read on to learn more!
Contents
Defining a Contract
A contract is a legal agreement between two parties, in this case, the buyer and the seller. It outlines the real estate terms and conditions of the sale, including the agreed-upon price, contingencies, and other relevant details.
When both parties sign the contract, it becomes legally binding.
Importance of Being Under Contract
When you’re under contract for a house, it means that the seller has accepted your offer, and both parties have agreed to the terms of the contract. This is a crucial phase in the home-buying process as it marks a commitment from both the buyer and the seller.
Responsibilities of the Buyer
As a buyer, being under contract comes with several responsibilities. Firstly, you must ensure that you meet all the conditions outlined in the contract within the specified timeframes.
These conditions may include obtaining financing, completing home inspections, and securing homeowner’s insurance.
Seller’s Obligations
Just like the buyer, the seller also has obligations during the contract period. Typically, sellers must provide the necessary disclosures about the property’s condition and resolve any issues that were agreed upon in the contract, such as repairs or renovations.
Contingencies in the Contract
Contracts often include contingencies, which are conditions that must be met for the sale to proceed. Common contingencies include mold testing and inspection, financing, and appraisal contingencies.
If any of these contingencies are not satisfied, the contract may be terminated, and the buyer can back out of the deal without any penalties.
Earnest Money
As a sign of good faith, the buyer usually provides earnest money when entering into a contract. Earnest money is a deposit paid to the seller, which demonstrates the buyer’s commitment to purchasing the property.
This money is held in an escrow account and is credited toward the purchase price at closing.
Duration of the Contract
The length of the contract can vary, but it typically lasts for a few weeks to a couple of months. During this time, the buyer completes all the necessary steps, such as securing financing and conducting inspections, to ensure they are satisfied with the property before closing the sale.
Learning More About Under Contract for a House
Signing a contract on a house is a huge decision that should not be taken lightly. You should ensure that the contract is airtight and offers favorable terms for both you and the seller.
If you need help understanding any of the terms or want to learn more about the under contract process, be sure to reach out to a real estate attorney.
We have plenty of informative articles available to you throughout our site. Check them out!