What Does It Mean to Go under Contract for a House

When it comes to buying a home, going under contract is an important part of the process. This means that the buyer and seller have agreed to the terms of the sale, and the transaction is in the process of being finalized. But what exactly does it mean to go under contract for a house?

First, it’s important to understand what a contract is. A contract is a legally binding agreement between two parties, in this case the buyer and seller of a home. The contract outlines the terms and conditions of the sale, including the purchase price, closing date, and any contingencies that need to be met before the sale can be completed.

When a buyer makes an offer on a home and the seller accepts, the buyer typically has a certain amount of time to complete inspections and secure financing. This period is known as the due diligence period, and it allows the buyer to thoroughly inspect the property and make sure they are comfortable moving forward with the sale.

If the buyer finds any issues during the due diligence period, they can negotiate with the seller to have them fixed or to adjust the purchase price accordingly. If the buyer is unable to secure financing or if any major issues arise during the inspection process, they may be able to back out of the contract without penalty.

Assuming everything goes smoothly during the due diligence period, the buyer and seller will move forward with the closing process. This typically involves signing a mountain of paperwork, paying closing costs, and transferring ownership of the property from the seller to the buyer.

It’s important to note that going under contract is not the same thing as closing on a home. The contract is simply an agreement to buy and sell the property, and there are still many steps that need to be taken before the sale can be finalized. However, going under contract is a major milestone in the home buying process, and it’s a sign that the buyer is well on their way to becoming a homeowner.

In summary, going under contract for a house means that the buyer and seller have agreed to the terms of the sale and are in the process of finalizing the transaction. It’s an important step in the home buying process, and it typically involves a due diligence period during which the buyer can inspect the property and make sure they are comfortable moving forward with the sale. While there are still many steps to take before the sale is finalized, going under contract is a major milestone on the path to homeownership.