Are you house hunting? Is the home you want to make an offer on under contract or listed as under first right of refusal? Don’t worry, there is still a chance you could get the house or at least submit a backup offer. Discover what the terms under contract and first right of refusal mean and how this status could impact you as a potential home buyer.
What does under contract mean?
So, what exactly does under contract mean? When a home is under contract, a buyer has made an offer that the seller accepted, but the sale is not final yet. When the real estate transaction is officially complete, the status of the home will be marked as sold.
A property status showing as under contract or first right of refusal means that specific contingencies must be met before finalizing the sale. These contingencies can include the buyer obtaining financing, completing a home inspection, pending on the home’s appraisal or fulfilling any previously stated conditions, such as the sale of the purchaser’s current home or primary residence. The contract is considered null and void, and depending on the terms of the agreement, either party may withdraw from the sale if conditions aren’t met.
Under contract vs. Pending vs. First Right of Refusal
Homes under contract and pending do not mean the same thing. When a property is under contract, an offer has been accepted, yet contingencies are waiting to be met. A pending home means that all contingencies have been met and the home is moving toward closing.
A first right of refusal is a contractual agreement that gives a designated party the first opportunity to purchase a property or remove any contingencies named in the agreement before a new one can be made with another party. This right is typically limited to 24- to 48-hour time frames.
For a better understanding, review our previous blog: Under Contract vs. Sale Pending: Explaining the Difference.
Are homes under contract off the market?
Is the home of your dreams under contract? Don’t write it off yet—this home isn’t completely out of reach. If a buyer or seller fails to meet the contingencies, the home could return as an active listing.
While under contract, and both parties are working to meet their obligations, backup offers can be accepted by the seller.
A backup offer.
With a backup offer, you will be positioned as the next buyer in line. This is a regular offer, though some will offer more favorable terms, such as making a more generous offer or waiving certain contingencies.
Summary
Need help with your house hunting? Contact Ryan Roberts for all your East Alabama real estate needs. In the meantime, check out some property showcases and learn about our community by reading our blogs.