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Can You Buy A House That Is Under Contract?

Main Treasure Valley Life

When performing real estate searches online, you will sometimes come across the words under contract. What does it mean? Is it still possible to present an offer? Below is a detailed description of this term.

"Under contract" definition

Under contract refers to a purchaser who has made an offer on a home for sale that has been accepted by the seller. However, the offer is only valid so long as certain conditions are met. In the event that the purchaser doesn’t meet them within a specific timeframe, the offer becomes invalid. Once this happens, the property will be relisted as being for sale.

When a purchaser makes an offer to buy a property, they might add a contingency which gives them the option to terminate the deal without consequence should they discover that the premises require major repairs or another crisis emerges. However, in order for a written agreement to be considered under contract, the terms must be outlined with the agreement being signed by both parties.

What happens to a property under contract?

Once a property becomes under contract officially, the seller won’t be able to sell the home to anyone else other than the purchaser they signed the agreement with.  The property can only be sold to a different buyer if the purchaser who signed the agreement is not following the terms specified in it.

However, just because a property is listed as being under a contract doesn’t mean that the deal will go through. The purchaser may not be happy with issues found during the house inspection, or perhaps their financing falls apart. There are also cases where the appraisal might come back much lower than the listing cost.

Can sellers accept other offers for their under-contract property?

Yes, but in order to proceed with the sale they first have to terminate the current agreement with the other buyer, and this can only be done if the buyer fails to uphold the terms of the agreement. The seller is not allowed to terminate a deal simply because a new buyer comes along with a higher offer. These contracts are legally behind, which means that those who do not abide by them can be held legally liable.

Why you could still make offers for properties under contract

As stated previously, there is no guarantee that a property under contract is going to be sold. The deal can fall apart for many reasons, and if you’ve submitted your backup offer you’ll be next in line. It costs you nothing and will prevent the property from being immediately relisted. While you want to make an offer that is attractive, you should never bid more than their asking price.

In the event that a transaction doesn’t make it to the closing, you should inquire as to why this was the case. There are lots of reasons why this can occur and they could be red flags that are warning you to stay away. This is when you rely on the expert guidance of your local real estate agent for information about the best way to move forward in your situation.

Posted by AndrewS at 10/9/2021 2:57:00 AM

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