"Bought it on contract" - what does this actually mean?

3 Replies

Hi All, 

I have listened to podcast after podcast and so many guests quickly and easily always say "I bought it on contract", "I got it under contract", and other such versions. I don't really understand the intricacies of this statement. I know it allows you as the investor to close quick on a deal where the seller is trying to get out, without waiting the 45 days to close on a conventional loan, but that's about the extent of my knowledge on the subject.


Few specific questions - who writes up the contract, what does the contract entail, when is money exchanged... sort of the basics of buying on contract. I tried to look for this on the forums with no luck, if there is a good thread somewhere I would appreciate if somebody could point me to it. 


Thanks so much! 

It’s a legally binding piece of paper (contract) that lays out the terms of the sale, signed by the seller and buyer.

Originally posted by @Tyler Jordison :

Hi All, 

I have listened to podcast after podcast and so many guests quickly and easily always say "I bought it on contract", "I got it under contract", and other such versions. I don't really understand the intricacies of this statement. I know it allows you as the investor to close quick on a deal where the seller is trying to get out, without waiting the 45 days to close on a conventional loan, but that's about the extent of my knowledge on the subject.


Few specific questions - who writes up the contract, what does the contract entail, when is money exchanged... sort of the basics of buying on contract. I tried to look for this on the forums with no luck, if there is a good thread somewhere I would appreciate if somebody could point me to it. 


Thanks so much! 

 The term "I bought it on contract" means that the buyer is using a Land Contract or other seller financing and not using a bank.

 "I got it under contract" (should be "I've got it under contract") basically means that the seller has agreed to sell and the buyer has agreed to buy but the conditions haven't been met to close yet. This is usually said when using a real estate agent and traditional bank financing. It is basically informing anyone that would have an interest, that an agreement has been reached and they expect everything to proceed normally.

If you use a real estate agent, they write up the contract. 

If you don't use a real estate agent You can write up the contract or your attorney can write up the contract too. 

There are two ways to buy a property:

1) with a real estate agent (the real estate agent takes care of all of the paperwork for you) Money is exchanged in escrow.

2) without an agent, on your own or using an attorney. If you don't understand this process, have a real estate attorney do the paperwork for you so that it is done properly. Money "Should be" exchanged in escrow.

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