What does under contract mean

Question

I inquired about a duplex that was for sale, both sides are already rented, the real estate agent said it was under contract, what does this mean?

Jerry W. · Answer

@Matthew Holman, my experience means that the seller has signed a contract with a buyer.  It is similar to being sold but there has not been a closing yet.  Sometimes properties fall back out of contract.  Things like not getting financing or inspection disputes, title issues, etc occasionally cause accepted offers to fall apart.  That is not common but it happens.

Oren K. · Answer

To add another bit of terminology - And when all the conditions are met / waived, the contract goes firm / unconditional.

While there are exceptions, at that point the parties will likely close / transfer the property to the Buyer.

Jim Pellerin · Answer

Offer to Purchase, Agreement of Purchase and Sale, Purchase and Sale Agreement are all the same and referred to differently depending on where the property is being transacted.

I use my Realtor's contracts.

You are only under contract once the contract is fully executed and signed by both parties.

Curtis Harvey · Answer

The great part about BP is that there is always someone who asks/asked a question you are interest in the answer to.

@Jerry W.  Thanks for the explanation.

@Jim Pellerin  if an Offer to purchase the same thing as a purchase and sale agreement?

Are all Offer to purchase, purchase and sale agreements the same?  Does anyone have sample ones for Single and Multifamily Investing and after you modify them for your deal and submit it to seller, are you under contract?

Matthew Murphy · Answer

Also known as "Pending".

Jim Pellerin · Answer

There is probably an accepted offer to purchase that is conditional on something (financing, inspection, etc.).

Ned Carey · Answer

Jerry explained it well. The seller wrote a contract with a buyer to sell the property. However you can put in a backup offer in case the deal does not work out for some reason.

What does under contract mean

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