Omaha September 7, 2023

What Does It Mean When a House Is Under Contract?

When a home is under contract, it means there’s an agreement that both parties have reached regarding the sale of a particular home.

In a real estate transaction, a home is considered ‘under contract’ once both the buyer and seller agree to the terms and conditions in the contract. They’ve both signed the contract, and the buyer has deposited the earnest money through the terms agreed upon.

Earnest money is typically deposited within 48 hours of the contract’s acceptance and the amount varies by state. Here in Nebraska, it’s typically 1.5% of the agreed upon purchase price. That amount is credited toward the buyer’s down payment at closing.

The earnest money shows “good faith” from the buyer, confirming the buyer’s true interest in purchasing the property. Earnest money can be forfeited if a buyer has a changes their mind about the sale.

What happens after a house is “under contract”?

There are a few boxes to check before a home sale is final. As the buyer, that could mean scheduling inspections and getting financing buttoned up. A buyer will also want to refrain from making any large purchases as this could put your financing in jeopardy.

As a seller, you’ll be completing the work necessary to sell the home while keeping in mind the deal could fall through. Keep your home in showing order so you can entertain back-up offers, while allowing home inspections and making repairs based on those inspections. As with the  buyer, you’ll be in close contact with your Realtor as the sale progresses.