When buying a home, you’ll notice a lot of different categories when perusing real estate listings. One status is “under contract.” This term means the purchase process has essentially begun between the seller and a buyer.
It doesn’t necessarily mean the house will be taken off the market. There’s still a chance the deal might fall through, which is why the listing isn’t removed.
When Does a Listing Go Under Contract?
When buyers want to make an offer, there are several steps they will have to take. They need to determine how much they want to offer and, typically, they’ll have to submit a pre-approvement letter. This shows they will have the funds necessary to support that offer. A buyer’s agent will submit an offer letter that includes all of this information.
Even if the seller accepts the offer, the house will still not be “under contract.” The buyer and seller will also have to agree to the contingencies. Once everything is agreed upon, the house goes under contract.
What Happens When a House Is Under Contract?
The house remains under contract until all contingencies are met. For instance, the sale may be contingent on the home inspection. If the inspector finds a problem and a solution can’t be found between the seller and buyer, the buyer might withdraw. The house will no longer be under contract. When this happens, other buyers will be able to make an offer to purchase.
While most houses that are under contract are sold, there are some that go back on the market because the deal fell through. Because of this, keep your eye open for desirable under-contract homes.
For more tips on buying a home, contact us at Randy Lindsay today.
There has been a massive demand amongst homebuyers this year. Interest rates for mortgages are incredibly low and people are looking for stability and security following the pandemic. On top of that, the supply is low as well since many homeowners are staying put. While such a seller’s market might seem like a big advantage if you plan on selling your home, it could be a detriment as well. The following are a couple of reasons why you should be careful if you plan to sell your home during this seller’s market:
- Finding a new home can be a challenge – Home values have skyrocketed, and with so many buyers out there, you may even get more than what you expected should a bidding war start. But remember that there’s a flip side: if you need to buy a home after you sell, you’re going to face stiff competition and may end up overpaying for a new home.
- Many buyers are waiving home inspections – Buyers are waiving certain contingencies, such as home inspections, as a way to entice sellers to accept their offer. However, it may be a mistake to agree to this. Should the home inspection be waived and the buyer finds something wrong with the house after the fact, you may find yourself in a messy legal battle.
- Many buyers are waiving appraisals – If a buyer waives the appraisal and submits a bid that’s much higher than the appraisal would have been, they’ll get stuck having to cover the difference, which they may not be financially capable of doing. As a result, the deal may fall apart.
Be careful when navigating a seller’s market as a home seller. For more advice on selling your home successfully, be sure to contact us at Randy Lindsay today.
At the moment, the home buying challenge is a difficult one. Why? Because it’s a seller’s market: the housing supply is low and the number of buyers on the prowl for a new home is high. One of the things many buyers are doing to make their bids stand out is to waive certain contingencies. While you might be willing to do so, the following are three contingencies you should be sure to keep despite what the competition may be doing.
- The home inspection contingency – Most home sales are contingent on a professional home inspection. This ensures that you don’t buy a house that’s riddled with expensive problems you didn’t know about (such as having to replace the roof). If you waive this contingency, you could end up buying a lemon without much legal recourse.
- The appraisal contingency – An appraisal gives you information about the property’s value vs. what the seller is asking for it. The appraisal is important because your lender wants to make sure it’s not lending you more than what it’s worth. If you waive the appraisal and sign on the dotted line, you may end up having to pay the difference between the appraisal and the cost since your lender won’t cover that. If you can’t cover those costs out of pocket, the deal could fall through.
- The financing contingency – The financing contingency states that your offer is dependent on your ability to secure a loan. If you waive this contingency and you end up being unable to get the loan you need, you could lose your deposit.
If you’re looking to buy a home soon, don’t waive any of these contingencies in an attempt to craft a more competitive offer. For more home buying advice, be sure to contact us at Randy Lindsay today.
When it comes to selling your home, you need to understand exactly who might be interested in buying it. Only then can you reach them through your marketing efforts. Don’t assume that everyone might be interested, otherwise you won’t be able to market your house effectively and can therefore miss out on potential buyers.
Understanding Your Buyers
If your house only has two bedrooms, then a buyer with a large family isn’t going to be interested. Trying to market your house to those buyers will be a waste of time. However, if you have a four-bedroom house, trying to target single buyers isn’t a good idea either. For example, highlighting bars in your area might appeal to single buyers, but they won’t have a need for that many bedrooms. You’re first step should be to figure out what types of home buyers your home will appeal to.
Finding The Right Buyers
When you put together your listing, which includes a description of your home, the neighborhood, and photographs, you need to keep in mind the type of buyer you’re trying to target. If your house is tucked away in the suburbs far away from the city, highlighting a potential home office is a good idea. If your home is in a quiet area and falls within a great school district, you should target families by noting these facts in your description.
As for where to find these buyers, a good real estate agent can help. They can help put together a listing that’s properly optimized for the right keywords and that highlights the right features to attract your target audience. Additionally, local agents have large networks, which means that they can connect with other agents to find buyers who fit the profile you’re trying to market to.
When selling your home, keep the buyer in mind. For more advice on how to sell your house successfully, contact us at Randy Lindsay today.
There comes a time for many homeowners when they realize their house is too small for their needs. Your family has grown and you need extra space. Or maybe your first home was all you could afford, and it was a bit on the small side to begin with.
You may find yourself in a position where it’s necessary and financially feasible to upsize. If you plan on upsizing, be sure to avoid these three mistakes when buying a home:
1. Not being realistic about your needs – Bigger doesn’t always mean better. If you buy a house that’s massively larger than your current home, remember it will cost more time and money to maintain that extra space. Plus you’ll need more furniture. Assess what your needs actually are before you jump to upsize.
2. Not taking a long-term view – Your current needs may not be the same as your future needs. For example, you may have two teenage kids living at home and that’s why you want to upsize. Everyone needs more space. But what happens in a few years when they move out? You may get stuck with extra space you’ll never use.
3. Rushing to upsize – Don’t dive into buying a new home the moment you’ve decided you want to upsize. Because you already own a home, you have the luxury of waiting until the time is right for you. There’s a lot to consider:
- How your financial situation looks
- The state of the local real estate market
- What you want to do with your current home
When buying a home to upsize, be sure to avoid these mistakes. For more professional advice on buying a home in general, contact us at Randy Lindsay today.