If you are currently looking at the real estate market in hopes of buying a new home, you might find it challenging to find a house that suits all your needs.
Many buyers, including those seeking Sacramento homes, have a set of criteria they want their new home to meet. Among them may include budget, location, proximity to key facilities, and availability of amenities, among others.
You may have to compromise to get a home closer to your expectations. However, you may find the perfect house, but it’s under contract.
This article will discuss why an under-contract house is still being shown and what that means for potential buyers.
What Is An Under Contract House?
An under-contract house is when a homeowner has accepted a buyer’s offer, but the deal is still not finalized. Closing on a home can take up to eight weeks on average and, for some properties, even longer.
The seller may keep the home on the market until the home is sold as an “under contract house.”
Note: Before a home is placed under contract, the buyer and seller must agree on all the stipulations and when one party can pull out of the deal. According to the written agreement, each party must fulfill specific terms to make the contract binding.
What Does ‘Active Under Contract Mean?
‘Active Under Contract’ is when the purchase deal reaches an advanced stage, with the process still ongoing. But, the seller still decides to keep the home on the market if the original contract falls through during the current negotiations.
The seller can accept new offers as a backup plan during this period if the current deal fails. This means people can still make offers on a home that is under contract and hope for the best.
Are There Other Processes That Delay Housing Deals?
Yes, other incidences can delay housing deals. In some instances, the buyer’s credentials might be vulnerable, and there’s a chance that the deal won’t go through. However, there are other things to consider, including:
The Home Financing Process
Several things come into play when acquiring a new property, one of the most important being finances. A buyer financing a home through a mortgage requires a financial green light from lenders to complete the purchasing process.
The process takes time because lenders, in their best interest, would want to minimize risk. Hence, a borrower needs to meet the requirements to qualify for a mortgage.
Depending on the type of mortgage the buyer seeks and the paperwork required, the process may get delayed. If the buyer raises the needed funds, the seller can remove the under-contract tag and revert the home to its original state.
The Home Appraisal Process
This is another vital requirement when buying a home. Before a lender finances your mortgage, they require a professional property review.
The professional, a home appraiser, must inspect the house, take measurements, do comparable pricing, and give the home a suggested value, aka price tag.
This is where most home deals get challenging. When the seller is uncomfortable with the appraiser’s price tag, they may back out from the agreement and put the home back on the market.
In cases where the buyer still wants the house, they have to pay for the difference in the appraised price tag and the seller’s price.
Home Inspection
After an appraiser, the buyer and seller need to set a date for the home inspection. The inspection is required to ensure that the buyer is not shortchanged.
As a buyer, you must ensure that your new home is just as the seller says. That aside, professional help is needed in this process.
A licensed home inspector goes into the house with experienced eyes and expectations. They check for defects like cracks, foundation problems, and pest infestation, among others, and advise you accordingly.
When The Buyer Is Also Selling Their Current Home
Buyers who already have a home may want to sell the current home before closing a deal on a new one. This may be because; they need that money to finance the new house and avoid paying for two mortgages at the same time.
In many cases, if the buyer can get their original home sold within the allotted time per the contract— they will either need to move forward or back out.
Can Homeowners Still Show a House Under Contract?
Yes, a seller can still decide to show a house under contract until the deal is completed. A home is placed under contract when the buyer and seller reach a sale agreement.
However, the deal is subject to some conditionality, including what is expected from each party during contract negotiations. This means the buyer and seller have a part in making the process successful.
But like any other deal, negotiations can break at any point due to some reasons, including financial obligations and home defects.
When this happens, the party that fails to fulfill its commitments pays damages as stated in the agreement, and the homeowner can therefore put the house back on the market.
Can You Make An Offer On A ‘House Under Contract’?
Yes, you are free to make an offer on any house under contract but don’t get your hopes up so high. However, you might get lucky if the current deal falls through due to one of the reasons listed above.
With that being said, making a backup offer gives you a chance of getting the house you fell in love with. But, it may also be a waste of time. You will be disappointed if you need a home urgently and the only hope you have is the house already under contract.
If you plan on buying a house in Sacramento, don’t be scared to place a backup offer on a home under contract while you keep on searching. As long as you know upfront all the stakes— you won’t be too upset if that home is sold to the original buyer.
Bottom Line
The fact that a house is under a contract doesn’t mean a deal has been completed. As a homeowner, you can still accept other offers but must make the current status of the home clear to the potential buyers. As long as everybody is aware of the conditions, there shouldn’t be any issues one way or another.
