When a Home is Under Contract: What You Need to Know

As a real estate enthusiast, I find the process of buying or selling a home fascinating. One important milestone in this process is when a home is under contract. It`s critical time buyer seller bound certain obligations deal its way closing.

Understanding Basics

Home under contract, means seller accepted offer buyer, but sale yet finalized. During period, parties legally obligated adhere terms contract, home essentially market, pending completion deal.

To provide a clearer picture, let`s take a look at some statistics:

Year Number Homes Under Contract Average Days on Market
۲۰۱۷ ۱,۲۵۰,۰۰۰ ۳۰
۲۰۱۸ ۱,۳۵۰,۰۰۰ ۲۵
۲۰۱۹ ۱,۴۰۰,۰۰۰ ۲۰

These numbers indicate a consistent trend of homes going under contract relatively quickly, which speaks to the competitiveness of the real estate market.

Important Considerations

During the period when a home is under contract, there are several key factors to keep in mind:

  • Inspections: Buyer typically right conduct inspections property. Any issues arise inspections may lead further negotiations even termination contract.
  • Financing: Buyer`s ability secure mortgage crucial aspect contract. If buyer unable obtain financing, deal may fall through.
  • Contingencies: may various contingencies outlined contract must satisfied before sale can proceed, sale buyer`s current home.

Case Study: The Impact of Being Under Contract

Let`s examine a real-life scenario to illustrate the significance of this stage in the home buying process.

In 2019, family California listed sale. After receiving an offer from a potential buyer, they entered into a contract. As a result, they began making arrangements to move into a new home and started packing their belongings. Unfortunately, the deal fell through due to the buyer`s inability to secure a loan. This left the family in a difficult situation, as they had already made plans based on the assumption that the sale would go through.

This case highlights the importance of being cautious and prepared while a home is under contract, as there are inherent risks involved.

When a home is under contract, it marks a significant step in the home buying or selling process. Both parties must proceed with caution and fulfill their obligations to ensure a successful transaction. By understanding the implications of this stage and being prepared for potential challenges, individuals can navigate the process with greater confidence.

Contract for Home Under Contract

Welcome legal Contract for Home Under Contract. This contract outlines the terms and conditions that must be adhered to when a home is under contract. It is important to carefully read and understand the contents of this contract before proceeding.

Contract for Home Under Contract

This agreement (“Agreement”) is entered into between the parties, referred to as the “Seller” and the “Buyer,” for the sale and purchase of the property located at [ADDRESS], hereinafter referred to as the “Property.”

۱. Escrow: The Buyer and Seller shall open an escrow account with a licensed escrow agent within three (3) business days of the execution of this Agreement. The escrow agent shall hold all funds and documents related to the transaction until the closing date.

۲. Inspection: The Buyer shall have the right to inspect the Property within ten (10) business days of the execution of this Agreement. The Seller shall provide access to the Property for the purpose of inspection. The Buyer may request repairs or negotiate a reduction in the purchase price based on the findings of the inspection.

۳. Financing: The Buyer shall make a good faith effort to obtain financing for the purchase of the Property. If the Buyer is unable to secure financing within thirty (30) days of the execution of this Agreement, the Seller may choose to cancel the Agreement and retain the earnest money deposit as liquidated damages.

۴. Closing: The closing date for the sale of the Property shall be on or before [DATE]. The parties shall meet at the office of the escrow agent to sign all necessary documents and complete the transfer of the Property.

۵. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of [STATE]. Any disputes arising out of this Agreement shall be resolved through arbitration in accordance with the rules of the American Arbitration Association.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Buyer:
Seller:

Top 10 Legal Questions When a Home is Under Contract

As a homeowner or potential home buyer, navigating the legal aspects of a home being under contract can be daunting. To simplify the process, here are the top 10 legal questions and expert answers to help guide you through this crucial stage.

Question Answer
۱. Can a Seller Accept Another Offer While Under Contract? Legally, a seller is bound to the terms of the existing contract until it is terminated or expires. However, some clauses may allow for additional offers to be considered under certain circumstances.
۲. What Happens if the Buyer Backs Out of the Contract? If the buyer breaches the contract, the seller may be entitled to retain the earnest money deposit or pursue legal action for damages.
۳. Are Sellers Obligated to Disclose Inspection Findings? Sellers are typically required to disclose any known material defects or issues discovered during inspections to the buyer in a timely manner.
۴. Can a Buyer Renegotiate After the Inspection? Buyers may request repairs or concessions based on the inspection results, but it ultimately depends on the terms outlined in the contract and the seller`s willingness to negotiate.
۵. What Happens if the Appraisal Comes in Low? If the home appraises for less than the agreed-upon purchase price, the buyer may choose to renegotiate, cover the difference in cash, or terminate the contract.
۶. Can a Seller Cancel a Contract Without Consequences? Sellers can typically only cancel a contract without consequences if the buyer fails to meet their obligations or if specific contingencies are not satisfied within the specified timeframes.
۷. What If the Home Doesn`t Pass the Title Search? If title issues arise, the seller may be required to resolve them or provide the buyer with marketable title to the property. Failure could result contract terminated.
۸. Can a Buyer Take Possession Before Closing? Allowing a buyer to take possession before closing can pose legal and financial risks for both parties. It`s crucial to address possession terms in the contract to avoid complications.
۹. What Happens if the Lender Denies the Buyer`s Mortgage? If the buyer`s mortgage application is denied, the contract may be terminated, and the earnest money deposit could be returned, provided that financing was a contingency in the contract.
۱۰. Can a Buyer or Seller Walk Away at Any Time? Both parties are bound by the terms of the contract and could face legal consequences for unilaterally walking away without a valid reason as outlined in the contract.
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