What Happens When a House Is under Contract

When a house is listed for sale, it will likely receive numerous offers from interested prospective buyers. However, once the seller accepts an offer, the house is considered to be “under contract”. This means that the buyer and seller have entered into a legally binding agreement, and the terms of that agreement will dictate the remainder of the home buying process.

The length of time that a house remains under contract can vary depending on the terms of the agreement. Typically, a home inspection will be scheduled within a few days of the contract being signed. This inspection will help the buyer to identify any potential issues with the property, and can be used to renegotiate the terms of the contract if necessary.

If the house is being purchased with a mortgage, the buyer`s lender will typically conduct an appraisal before the sale can be finalized. This is to ensure that the home is worth the amount being borrowed. If the appraisal comes back lower than the agreed-upon sale price, the seller may need to lower the price or the buyer may need to come up with more cash.

During this time, the buyer will also be working with their lender to finalize their financing. This includes providing documentation of income, assets, and debt, as well as getting pre-approved for a mortgage. If the buyer is unable to secure financing, the contract may be terminated.

Once all of the necessary inspections and appraisals have been completed, the closing process can begin. This is when all of the legal documents are signed, and the transfer of ownership from the seller to the buyer takes place. The closing can take anywhere from a few hours to a full day, depending on the complexity of the sale.

In conclusion, when a house is under contract, it means that the buyer and seller have agreed on the terms of the sale, and the home buying process is well underway. While there may be some bumps in the road along the way, as long as both parties are committed to seeing the sale through, the result will be a successful closing on a beautiful new home.