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What Does Under Contract Mean in the Real Estate World?

By Catherine

With so many popular terms in the real estate industry how is the consumer supposed to know what they all mean? Mortgage, appraisal, earnest money, due diligence, the list is truly endless. One of the more popular terms you will hear REALTORS® and lenders use is the term “under contract”. But what does that really mean?

There are many times where a buyer will look at real estate listings and find one that really grabs their attention. It has everything they have been looking for, but it is listed as either “Pending” or “Under Contract”. Buyers who have no idea what those terms mean usually find themselves feeling a bit uncertain. Many ask “is it sold?” “can I still buy it?”, and unfortunately the answer is not exactly transparent. To fully understand this we have to deep-dive into the strategies of negotiating a real estate transaction. Our guide below will help you understand what this all means and show you how we can help you through these situations.

Under Contract Listings Explained

The common understanding of “under contract” would leave most assuming that the home is sold and no longer available. In the real estate world it truly means something very different.

A house that is listed as “pending” or “under contract” in real estate terms indicates that the seller has found a buyer for the house, and that that buyer and seller have come to an agreement on some of the terms for the buyer to purchase the home.

An obvious question might be, if an agreement has already been made between buyers and sellers, why are houses listed as under contract still available for viewing to prospective customers?

This is because, despite the fact these properties are under contract, there is still a possibility that the deal may fall through, thereby giving another interested buyer an opportunity to seal the deal.

Under contract refers to a status in which the seller of the property has an agreement with a potential buyer, but the house is technically still advertised on the market because the agreement isn’t finalized yet. There are still contingencies that will need to be met before the property can be considered sold.

Contingencies

That brings us to the wonderful world of contingencies. Contingencies are certain conditions that have to be met or completed/agreed upon before a real estate transaction can be closed. Below is a list of the most common contingencies you will find in a standard residential sales agreement:

Sales Contingencies – this contingencies states that the offer to buy a home will only close if the buyer is able to sell their currently property. These are quite common in the real estate industry and sometimes can include the sale of multiple properties in order to purchase one.

Financial Contingencies – these are measures taken to prove to the seller that a buyer is able to purchase the property and has been approved for the mortgage needed to acquire the property.

Inspection Contingencies – this is a time period determined by the offer to purchase for the buyer to have the home and property inspected by a professional home inspector. This is also a time for a buyer to negotiate repairs that may be needed on the home.

Appraisal Contingencies – this is the agreement between the buyer and the seller that the home will be appraised, and that the value determined by the appraisal must be the purchase price or higher. If the appraisal comes back below the value of the purchase price in the sales agreement a new price may need to be negotiated or the transaction may need to be canceled.

Contingent VS Pending VS Under Contract VS In Escrow

Essentially these all mean the same thing. These titles are usually determined by the Multiple Listing Service (MLS).

We can assure you that “contingent” and “pending,” do in fact mean the same things as under contract. 

In the past, a “contingent” listing used to specifically mean that the buyer still had to sell their home (or homes) in order to close the deal. Nowadays, though, it is no longer limited to only this kind of contingency (sales contingency) and can imply other forms too. You may also see a term “Contingent Bumpable”. In our MLS system the “Contingent Bumpable” means the seller is still accepting offers and that their current offer can be “bumped” out under certain circumstances.

At any rate, a house listed as “under contract”, “contingent”, or “pending”, indicates that the house has a potential buyer with an agreement in place.

Under Contract Summary

Closing a transaction in the real estate world requires a few more steps than just writing an offer and closing the deal. To just name a few, there is the listing period, showings, negotiating, accepting an offer, clearing all the contingencies and then finally closing escrow.

Houses listed as pending or under contract have only made it through the initial offer being accepted and there is still a lot of work to be done. Houses in this phase of the process can still fall through and it happens often.

If you find your perfect home and it is listed as pending don’t give up. Contact your broker and see if there is a chance to put in a backup offer on the property. You never know what might happen!

Filed Under: Blog Posts, Resources Tagged With: Central Oregon, Oregon Real Estate, real estate

Bank-Owned Ranch

By Kerry ONeal

I was just doing some research for one of our other websites (go2oregon.com) and realized that the gorgeous almost 200-acre Lookingglass Ranch we just listed just outside of Roseburg is one of only a  handful of opportunities to buy a bank-owned ranch property in the State of Oregon. With so much news about bank-owned properties in the media, I would have thought there were several examples of bank-owned ranches across the state.  Much to my surprise, there is a shortage of this type of real estate being brought to the market by banks and other financial institutions.  And of the available bank owned ranches, I was very pleased to see ours as one of the most spectacular.  From luxurious master baths to the gourmet kitchen & professional office! Downstairs you will find your own personal spa room, fully equipped with hot tub and sauna.  Also downstairs and with a separate entrance from the exterior, is a room waiting to be your wine cellar.  Use the separate entrance to wheel your aged barrels into the room or just to leave open on a beautiful summer evening.

The location is to be desired.  Often times, a setting like this comes at the price of proximity to services and the rest of humanity.  Unlike other rural havens, the home is not 40 miles away from civilizations.  In fact, in about 10 minutes you can be selecting your produce from the local Ray’s Food Place.

And then there’s the land, equally as awe-inspiring….

The home sits near the back of the property, opposite the entrance from the road beyond the irrigated pastures, multiple barns, creek, and large pond.  A long, private driveway with an automatic gate ensures privacy and adds even more serene ambiance to the custom home perched on the hillside, quietly commanding expansive views across the valley floor and Lookingglass Creek.  This particular property is absolutely stunning.

 

Here is the

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If you would like to see a brochure or get more details, please contact us.

 

Filed Under: Blog Posts Tagged With: bank owned, bank owned real estate, go2oregon.com, Oregon Real Estate, Roseburg Oregon Real Estate

Feel so groovy this Valentine’s Day

By Kerry ONeal

Happy Valentine’s Day 2012!

We are a real estate company built on the relationships and trust of our clients. Whether you’re buying a home, buying commercial real estate, or selling property of all kinds, we thoroughly enjoy working with each and every one of you and we are proud to represent your interests in real estate as if they were our own. We take buying and selling real estate very seriously and realize many of your property endeavors are the most important financial decisions you will ever make. At the same time, we like to keep humor alive in all of our dealings so you, the client, know us on a personal level. We also want to take the opportunity to let you know we recently expanded the markets we work. Due to popular demand and our clients needing our service throughout Oregon, we now have an additional resource for Oregon real estate searches. This new real estate search site is built with cutting edge property search software and extremely easy to use. Want to search for land for sale in Portland? Looking to buy a commercial building in Roseburg? Need a condo in the Pearl District? Want to acquire rental property in Beaverton? This site can help. And of course, you can use our new and improved site for all of your Central Oregon property needs.

We really hope all of you appreciate the work that went into this Valentine Day’s video. Just finding that outfit in Josh’s size wasn’t easy. And then the make-up, choreography, rehearsals…it’s just what we’re willing to do to make sure we get results. Thanks for being a client.

Special note from Josh:  I just want to thank Kerry for being so patient while I tried on outfit after outfit.  It is difficult being the star of these videos (especially when I have no say in the part I play:)

Filed Under: Blog Posts Tagged With: oregon commercial real estate, Oregon Real Estate, real estate for sale in Oregon, Strategic Realty videos

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