Congratulations! You got pre-approved, you found your dream home, you made an offer, and it got accepted. You are officially under contract! Depending on the housing market, it may feel like this happened overnight or it may have felt like a bit longer of a journey. Either way, you’re now well on your way to completing your purchase and officially becoming a home owner. Here’s what you can expect now that you’ve transitioned from house hunting to house buying!

What Does Going “Under Contract” Mean?

When a house goes “under contract,” it means that the terms of the offer you submitted have officially been accepted, but the sale isn’t final yet. There are still a few steps that need to happen before you can officially call the home yours. These steps include finalizing the financial pieces, completing home inspections, and potentially entering further negotiations about home improvements or price changes based on the results of those home inspections.

What Does Finalizing Finances Entail?

As soon as your offer is accepted, the money you put in escrow, also known as your earnest money deposit, will be collected. Once that happens, you and the seller will have to meet certain agreements. These are conditions that are built into the purchase agreement to protect both the buyer and seller in case any unforeseen problems come up either with financing, or with the home itself. If either you or the seller fails to meet those conditions, the contract will become void, and either of you has the right to cease negotiations and terminate the sale.

What Are Common Contingencies?

The contingencies listed in your specific purchase agreement will depend on what’s most important to both you and the seller. These are typically items that, if issues should arise, would be major enough to turn your dream home into a nightmare and cause you to walk away from the sale. Here are some of the most common contingencies found in home purchase agreements:

• Home appraisal
• Loan contingency
• Home inspection
  • Roof
  • Foundation
  • Plumbing
  • Electrical
  • HVAC
  • Lead-based paint
  • Mold or asbestos inspection
• Pest inspection
• Sewer inspection
• Radon
• Well Inspection
• Preliminary Title Report

If any of these issues were to arise during the home inspection process, it could be a sign to change the terms of your purchase agreement. For example, if lead-based paint is discovered in the home, the seller could offer to have it professionally removed and the area it was found in repainted, or you could renegotiate a lower price for the home. If it’s something more serious, like structural issues or a problem with the title, it may be wiser to walk away from the deal altogether. Fortunately, your real estate agent will be able to provide guidance on the best course of action, should any issues come up.

How Long Does It Take for a Sale to be Final?

Once an offer has been accepted and the house is under contract, both buyer and seller have a specific amount of time to finish their due diligence. This time frame is typically somewhere between four to eight weeks from offer acceptance to closing day.

Can I Submit an Offer on a House that is Already Under Contract?

You can always place a backup offer just in case the house goes back on the market. Contracts fall through for various reasons, so there’s a chance of you getting the house you wanted. Keep in mind, if you choose to go that route, you may need to make a generous offer to make sure your offer is accepted.

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Whether you’re just looking or you’ve found your dream home and are ready to take the next steps, Neighbors Home Team is happy to join you on your home buying journey. Send us a message or comment below to get in touch.