If you’re in the real estate industry, then you’re probably familiar with the term “under contract.” However, if you’re new to the field, you may be wondering what this phrase means.
Simply put, “under contract” refers to a legal agreement between a buyer and seller of a property. This agreement outlines the terms and conditions of the sale, and once both parties have signed it, the property is considered “under contract.”
In the context of real estate transactions, being under contract means that the seller has accepted the buyer’s offer and both parties have agreed on the terms of the sale. This includes the sale price, any contingencies, and the closing date.
Once a property is under contract, it’s important to note that it’s not yet sold. The contract typically contains contingencies that must be met before the sale can be finalized. These contingencies can include things like the buyer’s ability to secure financing or the property passing a home inspection.
During this period, the property is considered to be in “escrow,” which means that the money for the sale is being held by a neutral third party until all the conditions of the contract are met.
It’s also worth noting that the length of time a property is under contract can vary. Some contracts may be as short as a few days, while others may take several weeks or even months to be finalized.
In conclusion, “under contract” is a term used in real estate to refer to the period of time between a buyer and seller agreeing to the terms of a sale and the actual closing of the transaction. This period is typically characterized by contingencies that must be met before the sale can be finalized.