If you’re selling your home or browsing real estate listings in the suburbs north of Boston, you’ve probably seen the term "under contract." But what does it really mean, and how does it affect your real estate transaction? At The Ternullo Team, we believe that understanding key real estate terms is essential for a smooth and successful experience. Let’s break down what “under contract” means and what to expect when your home reaches this milestone.
The Basics of "Under Contract"
When a property is marked as "under contract," it means the seller has accepted an offer from a buyer, and both parties have signed a purchase and sale agreement. However, the deal isn’t finalized until all contingencies are resolved, and the sale closes.
Common Contingencies in Real Estate Contracts
Real estate contracts often include contingencies—conditions that must be met for the sale to proceed. Here are some common contingencies you might encounter:
-
Home Inspection Contingency
Allows the buyer to inspect the property and negotiate repairs or credits based on the results. -
Financing Contingency
Gives the buyer time to secure a mortgage loan. If financing falls through, the buyer can back out of the deal without penalty. -
Appraisal Contingency
Ensures the property appraises at or above the agreed-upon price. If it appraises for less, the buyer and seller may renegotiate. -
Sale of Buyer’s Current Home
In some cases, the buyer’s purchase depends on selling their current home first.
These contingencies protect both the buyer and the seller but also mean that a property under contract isn’t guaranteed to close until all conditions are met.
How Is "Under Contract" Different from “Contingent”?
While both terms indicate the home has an accepted offer, there’s a subtle difference:
- "Contingent" means the home is under contract but the seller may continue to show the property and accept backup offers.
- "Under Contract" typically means the seller is no longer entertaining other offers.
However, once the seller signs an offer, they generally cannot accept another—even if it’s better—unless the original contract falls through.
Steps After a Home Goes "Under Contract"
Once your home is under contract, several key steps must occur to move the sale forward:
-
Earnest Money Deposit
The buyer submits a deposit (held in escrow) as a sign of their intent to purchase. -
Inspections and Appraisals
The buyer’s lender orders an appraisal, and home inspections are conducted as specified in the contract. -
Negotiations
If issues arise during inspections or appraisals, additional negotiations may occur. -
Final Approval
The buyer’s lender gives final mortgage approval, and all contingencies are cleared. -
Closing Day
Once all conditions are satisfied, both parties sign the final paperwork, and ownership officially transfers to the buyer.
Can a Home Fall Out of Contract?
Yes, a home can fall out of contract if contingencies aren’t met or if either party fails to uphold their obligations. For example:
- The buyer might back out if they can’t secure financing or are unhappy with inspection results.
- The seller might cancel if they’re unable to meet agreed-upon terms.
While these situations can be frustrating, they’re not uncommon. Working with an experienced real estate team helps mitigate risks and navigate challenges.
The Role of The Ternullo Team
Selling a home involves many moving parts, and having a knowledgeable real estate team is invaluable. At The Ternullo Team, we’re here to guide you through every step, from understanding what it means to go under contract to handling negotiations and finalizing the sale. Our expertise, clear communication, and attention to detail will help you achieve your real estate goals with confidence.
Ready to Sell? Let’s Talk!
Whether you’re preparing to sell your home or already navigating the process, The Ternullo Team is here to provide expert support and guidance. Contact us today to learn how we can make your real estate journey smooth and successful in the suburbs north of Boston.