Buying a home can be an exciting experience, but can be filled with confusing terms, especially if you are a first-time homebuyer. One such aspect of the home buying process is understanding the different statuses that a property can have, such as under contract, pending, and coming soon.
These terms can often cause confusion and lead to misunderstandings about the availability of a property. In this article, we will provide a detailed explanation of these statuses as well as define the differences between pending contracts and contingent contracts. We will also delve into what it means when a property is listed as under contract, giving you a better understanding of the home buying process.
Understanding The “Under Contract” Status When Buying a Home
When you see a home listed as “Under Contract,” it means that the seller has accepted an offer from a potential buyer. At this point, the buyer and seller have entered into a legally binding agreement that outlines the terms and conditions of the sale.
Under Contract status can also be referred to as “UC” or “Active Under Contract” (AUC) in some cases. This status can be displayed on the Multiple Listing Service (MLS) (such as BrightMLS) and other real estate websites, indicating that the property is no longer available for sale.
During the Under Contract phase, the buyer will typically have a set amount of time to complete any contingencies, such as a home inspection or mortgage approval. A contingency is a clause or condition included in a real estate contract that allows either the buyer or seller to back out of the transaction if certain conditions are not met. The seller may also have contingencies, such as a successful appraisal of the property, before the sale is final. If all contingencies are met and both parties agree to the terms, the sale will move forward to the Closing phase.
It is important to note that while a property is Under Contract, there is still a chance that the sale could fall through. This could occur if the buyer is unable to secure financing, the inspection reveals unexpected issues, or the appraisal value does not meet the agreed-upon sale price. In these cases, the property would become available again for other potential buyers to make offers on.
What Coming Soon Means in the Homebuying Process
In the home buying process, “Coming Soon” is a status used by real estate agents to advertise homes that will soon be listed for sale. Essentially, it means that the property is not yet on the market, but it will be soon. In the D.C. area a coming soon listing means the property will be available on the market within 21 days, so you can plan accordingly as a buyer.
By advertising a property as “Coming Soon,” agents can generate buzz and interest in the home before it officially hits the market. This can be especially beneficial in areas where homes tend to sell quickly and multiple offers are common.
It’s important to note that homes listed as “Coming Soon” cannot be shown to potential buyers until they are officially on the market. This is because the property may not yet be fully prepared for showings, and the seller may not yet be ready to receive offers.
While the “Coming Soon” status can be a helpful marketing tool for sellers, it’s important for buyers to keep in mind that they may face more competition for these properties. This is because other buyers may also be interested in the home, but may not be able to view it or make an offer until it is officially listed for sale.
In some cases, a “Coming Soon” listing may also indicate that the seller is still in the process of addressing any necessary repairs or updates before officially listing the property for sale. This can be an advantage for buyers who are looking for a property in a specific location but are willing to wait a little longer for the right opportunity to come along.
What Pending Means in the Homebuying Process
When a property is marked as “pending” in the home buying process, it means that an offer has been accepted by the seller, and the sale of the property is pending final closing. During this time, the seller cannot accept any other offers on the property, and typically all contingencies have been met and the sale is moving forward toward final closing. It’s important for buyers to understand that a pending status doesn’t necessarily mean that the sale will go through, however it is rare that a deal falls through at this stage.
The Role of Under Contract Status in the Home Buying Process in Washington D.C.
When a property is under contract this can potentially be used to your advantage in the homebuying process. Here’s how:
Competitive Offers
Let’s say you’re looking to buy a home in Washington D.C. and you find a property that’s just perfect for you. However, you notice that it’s already under contract. At this point you could still work with the listing agent through your realtor to submit a back-up offer since the deal may fall through because of various contingencies such as the buyer needing to sell their own home.
Negotiation Power
Depending on the type of contingency attached to the “under contract” status, a buyer may have more or less negotiating power in terms of price, repairs, or other aspects of the contract. While the seller has accepted an offer, it could be that the buyer’s final decision is dependent on a home inspection for example. Depending on the result of such contingencies, there could be an opportunity to submit a competitive offer and win the home if the deal falls through due to contingencies not being met.
By understanding the role of the “under contract” status and how it can impact the homebuying process, buyers can better prepare themselves for the competitive D.C. market and potentially increase their chances of securing the home of their dreams.
ONE Street President Samer Kuraishi points out that, “A good agent will always continue following up on a house that you lost.” This is why it’s so important to work with a good agent who knows the local market and can keep a close eye on homes that went under contract which may potentially come back onto the market.
Need expert advice? Schedule a no-obligation free consultation with local real estate experts from ONE Street.
