Monday, May 31, 2021 / by Teresa DiPeso
As you scroll through the real estate listings, you might spot a few that say the house is “under contract.” But what does “under contract” mean? Some states use "pending sale" as well, but New Jersey does not.
In New Jersey, a property is listed as “under contract” once a buyer has made an offer and the seller has accepted, and the property has cleared the attorney review period of three business days. The parties can also waive attorney review if both agree to. If the contract is prepared by attorneys, then it is "under contract" as soon as all parties have signed.
While that’s a big step, it doesn’t mean the deal is done quite yet.
So if you see a house you love that’s “under contract,” don’t give up quite yet, but don't get your hopes up either. Here’s how to handle this scenario and maybe even get the house.
What does ‘under contract’ mean?
When a real estate listing is “under contract,” there are still contingencies attached to that offer that must be cleared before closing. These contingencies often include financing, a home inspection, home appraisal, and sometimes the sale of the buyer’s current home or the seller finding a "suitable replacement property".
Since it’s possible for any of these items to fall through along the way, seller’s agents will sometimes take backup offers. In other words, if you want this home for yourself, that could still happen.
If you were to find a home that you absolutely love that is listed under contract with contingencies, it definitely to have me as your agent put forward a backup offer. Of course, this would only work if the current deal fell through.
How good are your odds of a contract falling through? That depends on a number of factors, including the temperature of the market. The hotter the market, the less likely it is to fall through. Right now the Shore market is red hot, and buyers are waiving inspections regularly or not asking for much to be fixed. The short answer, the odds are very low you'd succeed with an Under Contract home, but they're not zero either!
Try not to get your hopes hopes up too high when it comes to putting in offers on properties that are already under contract, and only consider it for properties you are truly in love with.
The vast majority of the time, the contingencies are cleared without a problem, and the sale goes through.
So how long do you have to wait to find out if you have a shot? Well, it could take a while. It typically takes 30 to 45 days from the date an offer is accepted until the sales contract closes and the sale is complete, sometimes less if it's a cash deal.
Contact me today to help you take advantage of low interest rates. It's a great time to buy at the Shore with home affordability at a 12 year high!
Call/text 609-780-1434 today!