Changes to a Contract: Everything You Need to Know
Changes to a contract occurs when one or both parties make adjustments to a legally-binding agreement and this can be done either in writing or verbally. 3 min read
Changes to a contract, or a contract modification, can occur when one or both parties need or want to make adjustments to a legally-binding agreement. Such modifications can be made either in writing or verbally, and can be done prior to all of the involved parties signing the contract, or even after. Additionally, contract modifications can be applied to the contract in it’s entirety, or just to certain sections.
Any modifications that are made to a contract must be agreed upon by all of the involved parties, just as the initial contract needs to be agreed upon by all parties. Assuming that all parties are in agreement, then the modifications will be enforceable by law, just as the original contract itself would be. However, if there are parties who are not in agreement to the modifications, then it may not be possible to enforce said modifications.
Reasons for Contract Modifications
There are any number of reasons as to why one or more parties may want to make changes to a contract. Some of these reasons include:
- Extend the length of the contract
- Change the duration of the contract
- Alter certain requirements under the contract, such as the number of items being requested
- Change certain terms within the contract, such as payment date, amount, dates by which goods and services are to be received, etc.
- Add or subtract terms within the contract
Additionally, there are other circumstances under which a contract may be modified. In fact, in some cases, by signing the original contract, you may be agreeing to future contract modifications. For example, your mortgage lender may have included language in the contract giving them the right to change your interest rate down the road. By having signed that contract, you are agreeing to potential future contract modification.
When Can Contract Modifications Occur?
Modifications to a contract can essentially take place at any time, assuming that all parties are in agreement, although it is easier to make modifications before the contract has been signed. Additionally, provided that the modifications being made are relatively minor (and, all parties involved are okay with this), the changes can even be handwritten on the original contract, and then dated and initialed by the individuals involved. If the changes being made are larger in scope, thus potentially changing the overall integrity of the agreement, it is best to have a new contract drafted, which will then be reviewed and signed by the parties involved.
Some initial contracts may include language regarding the process to follow, should modifications need to be made. If that is the case in your contract, then you and the applicable parties will need to ensure that those protocols are being followed in order to ensure that the modifications are enforceable.
Just as there are things to consider and look out for, when you sign an initial contract, you will want to keep some things in mind before agreeing to, or signing, any contract modifications, including:
- Do any of the provisions being proposed feel, to you, at all unfair or biased?
- Are your suggested modifications (if you have any) being included, or at least discussed?
- Is the wording of any modifications clear to you; are you clear on the proposed changes?
- Have you already begun working on meeting the terms and conditions of the original contract, and if so, will these modifications put you in a tough spot with continuing to uphold your end of the agreement?
- Are you prepared for multiple rounds of contract negotiations, should all parties not be in agreement to the initial modifications that are proposed?
- Is the new contract, or the modifications, still in accordance with the contract laws of your state?
Just as you may want to seek legal counsel before signing a contract, it is advisable to do the same when it comes to making contract modifications, as there are any number of variables to consider.
When Can Contract Modifications Not Be Made?
While there are plenty of times in which you may make modifications to a contract, there are also those times in which it may not be legally permissible. The most obvious among these are if the initial contract contains language that clearly states that modifications cannot be made. Provided that the contract is not in violation of contract law, then all parties will be expected to honor the terms and conditions.
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What Does Under Contract Mean?
Under contract definition.
What does it mean when a house is ‘active under contract’? When a home is active under contract it means that a buyer has made an offer on the home and the seller has accepted, but the sale is not yet final. When the transaction is complete, the status of the home will show that it has sold.
While the property is still under contract, all contingencies must be met before the sale is finalized. That may mean the buyer must secure financing, the home inspection still needs to be completed to confirm the property is free of serious defects, or other conditions that still need to be met in order for the sale to be finalized. Real estate contracts outline many conditions that must be met by both the buyer and seller. If either party fails to meet one of these conditions, the contract is breached and one party may back out of the sale.
Under contract vs. pending - what’s the difference?
When a property is pending, that means that all of the contingencies are removed, requirements are met, and the home is about to close. Basically, a pending property is much closer to being sold than an under contract property.
Is an under contract house off the market?
If you find the property of your dreams but it is listed as under contract, it doesn’t necessarily mean that you’re out of options since it is still possible that the buyer or seller may fail to meet one of the conditions needed for the sale to be final.
Most properties that are under contract are considered off the market, but the buyer has a specified period of time to fulfill their obligations. During this time, properties continue to be marketed but maintain the active under contract status until the sale is finalized, or the transaction is cancelled.
Can a seller accept another offer while under contract?
During this time, the seller may be willing to accept backup offers. A backup offer with especially favorable terms, such as a generous offer or waiving certain contingencies. Many things can go wrong during the under contract period and a fair number of homes will go back on the market. By putting in a backup offer, you’ll be positioned as the next buyer in line should the current contract fall through.
What is a backup offer?
A backup offer is when a home seller has accepted an offer from a buyer, but is still accepting offers from other buyers. Sellers state that they are accepting backup offers if they think the current offer may fall through. If you've fallen in love with a home that is under contract, you should get in touch with a Redfin real estate agent right away to explore your options for making an offer.
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January 07th, 2021
- What Does "Under Contract" Mean?
How Do Contingencies Work?
Financing contingency, appraisal contingency, inspection contingency, home sale contingency, what still needs to happen for the transaction to be completed, complete your mortgage application, schedule your home inspection.
- Request a Homeowner's Insurance Quote
Sign Your Loan Documents
The appraisal will be scheduled, take a final walk-through, prepare for all closing funds and documents, set up utilities, attend the closing, move into your new home, under contract we are here to help, under contract on a house, what happens next.
Buying a house is a long-drawn-out process that is incredibly stressful. In fact, roughly 40% of Americans say that buying a house is the number one most stressful event in all of modern life.
While there is little that can be done to make the process any quicker or less complicated than is, understanding the different steps in the process can help you to feel less stressed. There are a few things that happen next when you go under contract on a house .
After you've made an offer on the house and the seller accepts, the deal is likely "under contract." What does it mean to be under contract on the house? Let's take a look at everything that you need to know.
What Does "Under Contract" Mean?
When a house is under contract , it means that an offer has been made on the home by a buyer that the seller has accepted. However, the sale is not yet final as there are a number of things that need to happen before the closing. Typically the home will be listed as contingent or pending . Pending usually is a better signal the property is headed to the closing whereas contingent means there are other conditions that need to be met. Before the sale is finalized, all contingencies in the contract must be met.
In real estate contracts, there are four common types of contingencies. After the buyer submits an earnest money deposit into escrow, some of these types of contingencies might need to be dealt with.
If a buyer needs to obtain a mortgage from a lender in order to buy your house, a financing contingency will appear in the contract. It's likely that the buyer already submitted their mortgage approval letter to the sellers, now they need to pass all the conditions. In most scenarios, the buyer has already been preapproved by the lender at this point. However, the financing has yet to officially come through and needs to before the sale can be complete.
The lender is motivated to have an appraisal to make sure that the amount of money that they are loaning to the buyer for your home is a fair market value. The appraiser will go into the house and value the home as it compares to other properties. If the appraisal comes back under the agreed-upon price, you and the buyer can negotiate or the buyer can walk away.
Most buyers will have a home inspection done to a house they are buying. An inspection contingency allows buyers to negotiate or walk away if the inspection comes back with issues that need to be repaired.
Often times, buyers are both buying your home and selling a house at the same time. Basically, the home sale contingency says that they will buy your house but only after another property that they own is old. Financing, appraisal, and inspection contingencies are quite common in real estate contracts. Home sale contingencies are not unheard of but they are less standard.
As mentioned before, all contingencies need to be met in order for the sale to be finalized. Depending on the contract, this could include financing, appraisal, inspection, and/or home sale contingencies.
Depending on your own circumstances, more or less of the process might be underway by the time the house is under contract. In general, though, you will need to ensure that the following actions are taken once you are under contract on a house.
It is incredibly common for people to buy houses with a loan that they received from a mortgage lender . If this is how you are financing your home, and you haven't yet finished your mortgage application, this is one of the first things that you will need to do. You'll want to take note of the fact that many contracts specify a certain amount of time that you have to complete your mortgage application. You'll also want to get started on this process as quickly as possible because the mortgage process can go on for weeks.
You can check in with your real estate agent about scheduling a home inspection. They will be able to recommend a licensed home inspector if you don't know one and prepare you for what the home inspector is likely going to look for.
There is a limited amount of time, as specified in your contract when the inspection contingency is valid. This means that you will want to make this a top priority.
As the buyer, the home inspection is a wonderful opportunity for you to understand what exactly it is you are buying. Any issues that might not have come up during the showing or disclosure process will hopefully be revealed during this time. Barring any big home inspection problems , you are likely going to be able to work something out.
When you are buying a house you are making an enormous financial commitment. One of the worst things that could happen is that you purchase a property that has problems that you don't know about. While I home inspection can be quite stressful for the seller, as the buyer you should welcome this opportunity to learn as much as possible about the property.
Request a Homeowner's Insurance Quote
Another thing that you will want to do right away is to request a homeowners insurance quote. It is recommended that you start this process within one week of signing the contract. If you don't currently have homeowners insurance, you can talk to your real estate agent and asked him for referrals. When you find a homeowner insurance quote that is acceptable to you and that you accept, you'll want to pass your insurance information to your lender. It is common to pay the first full year's premium at the closing. On top of that, lenders frequently require that your escrow account contain a few months' worths of premiums.
Usually, there are pre-closing documents that you will need to take a look at and sign. They will be sent you by your mortgage lender. You want to take note of any changes as you will be signing the final copies at closing.
After the infection has occurred, most lenders are going to want a home appraisal. A home appraisal is frequently required by the lender in order to find out the current market value of the home. They want to ensure that they are not loaning the buyer more money than the house is worth. It can take between one and two weeks to get back the results of an appraisal. If you are getting a VA appraisal, this can even take longer. Though the lender is the one who orders the appraisal, the buyer is the one who pays for it. They are paid for upfront with a nonrefundable fee.
A home appraiser is a professional whose job is to look at the home from an objective point of view and determine the fair market value. They are not supposed to be swayed by subjective or aesthetic aspects of the home but they are rather making a determination based on the bones of the house and property. If your appraisal comes in too low, there are a number of things that you can do. As a buyer, you can renegotiate the contract terms with the seller. If there is an appraisal contingency in the contract, you also likely have the option to walk away from the deal entirely.
If the seller is not willing to negotiate, it is also possible when you're buying a house to put down a bigger down payment so that the mortgage lender is lending you a smaller percentage of the asking price.
During the house buying process, it's likely that during negotiations it was determined what repairs would be made or which objects would be removed from the property are left behind. During the final walk-through, you have the ability and opportunity to make sure that the house is in the condition that you had agreed upon with the seller.
Before you attend the closing, you'll want to get together any necessary funds and appropriate documents. Your real estate agent can help you to understand which documents you need to bring and how much money exactly should be wired to the attorney performing the closing. In the Final Closing Disclosure, the required amount of money will be included. Before the closing, you'll want to wire any necessary funds 24 to 48 hours before the closing time. This is just to ensure that everything goes smoothly and nothing gets delayed. Another thing you want to be aware of is the fact that there has been an increase in wire fraud recently. You should stay on your toes in terms of last-minute instruction changes or anything that seems suspicious. The safest thing to do is to confirm the wire instructions over the phone.
One of the things that you want to do a couple of days before you move into your home is to turn on all of the utilities. You can always get in touch with the listing agent in order to find out who the seller's utility providers are. You can then decide whether or not you want to stay with the same providers or find new providers. Things like gas, electricity, cable, water, phone, and Internet are all things that you will want to have set up right when you move in.
You made it! The closing day has finally come and you have almost completed buying a house. The closing usually happens at the closing attorney's office. This whole process takes about an hour and required you to sign your closing documents. Once everything is signed and money has been handed over, you will be handed the keys to your new home.
You might think that it would never happen but you are finally here. It is time for you to move into your new home. Congratulations!
Whether you are moving between houses in the same neighborhood or moving across the country, getting organized for your move is something that you will want to start early on. If you are going to be hiring movers, you will want to set this up as soon as possible to ensure that they are available on the day that you want to move.
Before moving in, you'll also want to have a plan for where all of your belongings are going to go. Measuring the floor plan and finding spots for each piece of furniture can help to make moving less stressful.
For those that are moving to the area , we are happy to help in any way we can!
If there are any repairs or upgrades that you want to make before moving into your new home, it can make a lot of sense to get these done before you are living in the house. It is surprisingly difficult and disruptive to be both living in a space and working at the same time.
You'll also want to take the opportunity when the house is completely empty to do a deep clean. Whether you and your family do that yourself or you hire a professional cleaning service, you may as well start off you're new life in your new home on the right foot.
Additionally, you'll also want to change your address with every person and institution that regularly sends you bills or letters. It can also be good practice to change all of the locks on a new house.
Whether you are selling a house or buying a house, uphomes.com has all of the resources you need to help make your Charlotte, North Carolina real estate transaction as smooth, simple, and pleasant as possible. If you're under contract on a new construction home the process is typically much easier as the builder will make all the repairs for you. You can view new construction homes for sale on our website.
Are you looking for a new home? You can find homes for sale in the Charlotte area right here with our convenient and easy to use real estate website!
Ryan Fitzgerald
Hi there! My name is Ryan Fitzgerald, and I am a REALTOR®. My goal is to help you learn more about real estate through our Real Estate Blog! Hopefully, you enjoyed the above blog post and it found a way to provide help or value to you. When you're ready to buy or sell a home of your own let us know here. Please feel free to join the conversation by dropping us a comment below.
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- Under Contract
Under Contract Listings: Here’s What You Need To Know
Disclosure: This post contains affiliate links, which means we receive a commission if you click a link and purchase something that we have recommended. Please check out our disclosure policy for more details.
If you’re looking for a new home, you know that finding the right house can be a daunting task, particularly in a highly competitive market. It’s hard enough finding a house that has everything you want, let alone finding one within your budget.
It’s possible that you’ll find the right house at the right price point, but it’s listed as “under contract.” What does it mean when a house is under contract? And is there still a chance you can buy a house if it’s under contract? We’ll explain why falling in love with a house under contract doesn’t always spell heartbreak.
What Does “Under Contract” Mean In Real Estate?
Under contract means that a seller has accepted an offer on the property, but the sale isn’t final until all contingencies are met. It typically takes 4 – 8 weeks from the date the offer is accepted until the sale is complete.
Financing Contingencies
There are several contingencies that may be outstanding on a property before a sale can happen. One of them is a financing contingency. Essentially, the buyer has to be able to get financing through a mortgage or some other source in order to buy the home. In this case, the house will remain under contract until the buyer’s financing is approved.
Appraisal Contingencies
Houses under contract might also depend on an appraisal contingency . Mortgage lenders are unable to lend more than the appraised value of the property. If the appraisal is low and the seller isn’t going to come down to the appraised price, the buyer has to pay the difference between the amount the home appraised for and the actual sale price, which can become expensive when you factor in a down payment and closing costs .
Home Sale Contingencies
Other houses go under contract when a buyer makes the sale of their new home contingent upon the sale of their current home so they don’t have to deal with multiple mortgage payments. The downside to this is that if the buyer doesn’t sell their home within a specified amount of time, they lose out on the home.
Home Inspection Contingencies
The final common contingency that keeps a house under contract is a home inspection contingency . The buyer and seller can write into any contract that the buyer gets to walk away for a major issue like the roof or HVAC system needing replacement. If so, the seller will have to find a new buyer who’s willing to deal with these things or make the upgrades themselves.
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What Does “Active Under Contract” Mean In Real Estate?
When you see a home listed as “active under contract,” it’s an indication that the seller has accepted a formal offer on the house. However, sellers are aware that it’s not a done deal until the closing paperwork is signed, so they may solicit backup offers during this period. If something falls through with the initial offer, they may come back to your offer and you could end up getting the house.
“ Under Contract” Vs. “Pending”: What’s The Difference?
In addition to “under contract” and “active under contract,” you may also see some houses listed as “sale pending.” Understanding the difference between the terms can be tricky since some real estate markets or listing services may use them interchangeably.
Most of the time, though, a pending status means that the seller has accepted an offer and all contingencies have been removed. The home sale may still be dependent on additional factors, such as the final inspection, but the seller typically doesn’t accept backup offers once the sale is pending.
When in doubt, talk to your real estate agent if you’re interested in a home with a pending status.
Should You Put In A Backup Offer On A House Under Contract?
There are pros and cons to putting in a backup offer. Let’s briefly run through them.
On the plus side of backup offers, it helps to remember the adage “nothing ventured, nothing gained.” It’s true that you most likely still won’t get the house, but if you don’t put in a backup offer, you also damage your chances of getting it should the other offer fall through because another potential buyer may have put a backup offer in.
The main downside to putting in backup offers is that you’re taking time and effort to put together a proposal to buy a home that you have a slim chance of getting. Having your heart set on this one shouldn’t stop you from finding other houses that are actually on the market and could be right for you. However, there’s always a reason a contract falls through, and it’s important to know what that is so that you can avoid any pitfalls.
If you do put in a backup offer, you obviously want to make it stand out. One way to do that is to offer more than the seller’s asking price .
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How Often Does A House Under Contract Fall Through?
As we discussed before, t here are various reasons that a house under contract could end up not selling to the person who made the first accepted offer. There are several contingencies that may or may not have to be met, but most of the time, a house under contract results in a completed transaction.
In the vast majority of cases, people are buying a home with a mortgage. Because of this, they have to qualify for their financing and if their financial situation has changed since they were approved with a budget to shop for a home, they can be denied before closing. You can also have an appraisal come in low and not be able to reach a deal as a result. It’s even possible to fail an appraisal if the appraiser determines that anything in the home has to be remedied in order to avoid a health and safety issue.
As mentioned previously, if there are specific issues enumerated in the contract that let a person get out of the contract based on the home inspection, that would be another reason for a deal to fall through. Finally, for the purposes of affordability, people might make the sale of their current home contingent on the sale of their previous one. In these instances, the previous buyer can lose out on their opportunity for a home if they can’t sell their current one in time.
The National Association of REALTORS ® tracks pending home sales across the country, and its data shows that 80% of home selling processes are completed within 2 months of a signed purchase contract. An even bigger percentage of home sales are completed within 4 months. The chances are low, but canceled contracts do happen.
What Happens If The Contract Is Canceled?
If the buyer fails to meet their obligations under the purchase contract within the specified time frame, that transaction will be canceled, and other buyers will have the opportunity to purchase the home. However, now isn’t the time to jump at the chance to sign a contract and proffer your earnest money deposit . You should do the legwork to find out why the previous contract didn’t work out.
If the house failed an appraisal or the home inspection turned up a major issue that the potential buyer didn’t want to have to deal with, that’s something you should be aware of. Even if you do decide to move forward with an offer, you’ll be doing so with the most information possible. This is always a better position to be in.
The Bottom Line: A House Under Contract Isn’t Always A Done Deal
If you found the perfect home, but it’s under contract, it’s important to keep your chin up. Although most pending homes do close, a variety of things can happen to change that. An appraisal might come in low and be a sticking point in negotiations, or a buyer may not be able to sell their current home. While it’s important to understand why a home has fallen out of contract, the previous buyer’s loss could be your gain if there are no red flags, and your backup offer gets accepted.
If you’re ready to begin your home buying journey and make an offer on your dream home, get started today.
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Victoria Araj
Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.
- Can You Switch Realtors While Under Contract as a Buyer?
- Choosing an Agent
When you make an offer on a house and it’s accepted, you are officially under contract or in the pending sale status. This is a period of waiting for the seller while the buyer completes various contingency hurdles. The buyer will secure a home inspection and appraisal while also working with the mortgage company to get funding. Once all of the loan paperwork is completed and the home sale is approved, the buyer and seller can attend the closing appointment.
But what happens if you don’t like how your Realtor runs their business? Can you switch realtors while under contract as a buyer? This is a tricky question that has multiple answers depending on your current situation. Here’s what you need to know about firing your Realtor before you close on a property.
Do you have a broker agreement?
The best way to answer, “can you switch realtors while under contract as a buyer,” is to look at your broker agreement . This is usually a contract that real estate agents will give to buyers stating that they have an exclusive relationship with the Realtor. The broker agreement will specify commission expectations and should provide details about when termination is acceptable. Turn to this contract to see if you are able to fire your Realtor.
If you don’t have a broker agreement, you may be able to fire your Realtor without any issue. Your current agent won’t have a legal document to turn to in order to receive compensation for their efforts. If you do have a broker agreement, you might have a harder time switching agents. Once you are under contract on a house, your agent might have a commission claim on the property. Even if you switch agents, you would still owe your current Realtor money.
Going forward, always make sure your broker agreements have termination clauses. This section should provide a timeline for when a buyer can fire a Realtor and what reasons they might do so. A termination section protects a Realtor from getting fired unfairly while also providing buyers with opportunities to end the relationship. If a Realtor hands you a broker agreement without a termination section, ask them to add one or submit the contract to a real estate attorney for modification.
Why Being Under Contract Matters
The timeline in the buying process matters when switching Realtors. If you reach out to an agent to look at houses but none of your offers are accepted, you can fire your Realtor at any time. While this agent did invest their time and effort into helping you tour homes and submit offers, they weren’t successful in helping you secure a home. If you think another agent would do a better job – or you simply aren’t getting along with this one – then you can fire your current Realtor.
However, if you find a house you love, make an offer , and have it accepted by the seller, it’s much harder to fire your Realtor. In this case, they have done their jobs successfully. You are taking steps daily to reach clear-to-close and to move into your next house. Because of this, your Realtor deserves some compensation for their efforts.
Can you switch Realtors while under contract as a buyer? Yes, but it is much harder. Even if you fire your Realtor at this point, you will still have to pay them a commission on the sale. New Realtors might be reluctant to work with you because you are already under contract with a seller. They wouldn’t have much work to do before closing but they also wouldn’t get any money from the sale.
Trying to switch Realtors at this point can result in little more than a bad relationship between you and your agent. Your Realtor will know you aren’t happy with their performance and you will feel annoyed that you can’t switch to a better representative.
How Broker Agreements Protect Agents
Agreements between agents and their buyers or sellers are meant to protect Realtors from getting swindled. For example, a seller has to pay a six percent commission on a home sale – three percent to each of the agents involved. If the seller decided to fire their Realtor and the buyer fired their Realtor, then the two parties could work together without paying any commission fees. Both agents worked to broker the deal and neither would get paid for their efforts.
A broker agreement states that the Realtor would still earn their commission if they help a buyer find a home and get an offer accepted. The broker agreement can also provide a window of time that the buyer has to work with an agent. For example, a broker agreement can last 30 days, which means a buyer has a wait a month before switching Realtors. If an agent can find an appropriate home for the buyer – or get an offer accepted – in that window, the buyer can switch agents.
Buyers can also switch Realtors if any accepted offers don’t go through. If the seller backs out of the deal, the Realtor no longer stands to earn a commission on the sale. The buyer essentially has to start the home search process all over again. If you are unhappy with your Realtor at this time, you should be able to switch and work with a new one.
What does broker exclusivity mean?
In your broker agreement, you may come across terms related to exclusivity . This means the Realtor you are working with is the only agent currently representing you. Some agents ask buyers to sign exclusivity agreements at the start of the home search. They don’t want to waste their time showing you houses, only for you to make an offer through another agent. Other agents include this clause in their terms once you are ready to make an offer.
You can work with several different Realtors throughout the buying process. However, once you sign this agreement, you are limited to working with only one. If you decide to move forward with this Realtor, make sure you let your other agents know. They will move on to work with other clients and will stop trying to find you a home.
Consider Switching Agents Within the Same Firm
If the answer to the question, “can you switch realtors while under contract as a buyer,” isn’t what you hoped, know that there are other options to consider. Realtors don’t want to work with clients who are unhappy with them. It creates a poor relationship that can potentially lead to negative reviews that hurt their future lead-generation abilities. If you do not like working with your Realtor, work with them to find alternative solutions.
For example, your agent might be able to connect you with another Realtor within their firm who is willing to help you with the closing process. The Realtor might give this agent a portion of their commission as a thank-you for taking on the account. You won’t have to work with your existing Realtor anymore and instead can move forward with the new agent.
This is considered a more peaceful solution than trying to wash your hands of your current Realtor while searching for a new agent in firms across town. Your current Realtor will still be on all of the home purchase paperwork but your main point of contact will be a different person.
Talk to Your Realtor About Your Concerns
It’s understandable if you want to switch Realtors during the buying process, but you need to treat this relationship professionally. No one likes to be blindsided by a firing or an unexpected conversation about switching representatives. Instead of immediately firing your Realtor, request a meeting or a call to discuss your concerns. Here are a few tips to do this successfully:
- Be Direct. Evasive statements can be confusing and frustrating to listen to. Your agent might not know what you are trying to say or what you want from them.
- Be Specific. Provide clear examples of times your Realtor left you unhappy. For example, if you have issues communicating with them, highlight times they were unreachable or never got back to you.
- Provide solutions: Consider listing a few ways your Realtor can solve the problems you are experiencing. What would make you happy? This will help both parties move forward toward positive outcomes.
- Be Firm: How your agent reacts to this conversation is out of your control. They might deny any wrongdoing, push back against your comments, or try to convince you that you are the problem. Do not let them push you around.
Overall, the tone of this conversation can remain neutral with the right messaging. You want to highlight negative behaviors and provide solutions to avoid them. From here, it’s up to your Realtor to change. If you are still unhappy with their performance after a designated period, you can move forward with the firing process.
It shouldn’t come as a surprise to your Realtor that you want to switch agents if you have already voiced your dissatisfaction with them.
Write a Letter of Termination
If you decide to move forward with your Realtor firing , the next step is to write a letter of termination. This is an official notice to your agent that you are no longer interested in their services. This letter usually accompanies another discussion with them to end your relationship.
Your termination letter can be used by both parties if there is a disagreement on who receives a commission or another form of payment for their work. In the letter, clearly state the issues you had with the agent and the steps you took to address them. (This is why the previous meeting is so important). Then explain any compensation the Realtor will receive and why.
You can send this letter via email in PDF format to ensure that it cannot be edited or changed without your consent. You can also add your real estate attorney to the email thread or other relevant parties who might benefit from seeing this email and conversation. These people are now your witnesses to the termination.
Your Realtor is allowed to push back against the firing. They can claim that you owe them money and might try to work with a lawyer to secure payment. This is why having a clear answer to, “can you switch realtors while under contract as a buyer,” is so important. You need to know who you are required to pay and why. Talk to a lawyer if you are unsure.
Find a Quality Realtor Through UpNest
If you are unhappy with your current agent and want to switch Realtors as a buyer, check out the services provided by UpNest. We can recommend a few top agents in your area who have a proven track record of good customer service. We only choose Realtors that have high customer ratings and significant experience levels in their field. Our service is completely free for buyers and you are not obligated to choose any Realtors we recommend.
Try UpNest for free today and discover quality Realtors you want to work with. See how we can help you.
In most cases, you cannot switch Realtors if you are under contract with a seller. This is because the Realtor worked to broker the deal and is owed a commission on the sale. Even if you do switch agents, you will still have to pay a commission to the Realtor you fired.
A broker agreement is meant to protect a buyer’s agent. It shows that the buyer is working with the Realtor exclusively and the commission goes entirely to them. Until a buyer signs one of these agreements, they can work with multiple Realtors.
Even if you are not happy with your Realtor, you still need to end the relationship professionally. Talk to your agent about any issues you have and present them with a letter of termination. Try to have an objective third party present in case your Realtor pushes back or tries to sue you for lost income.
Moving Across the Country: What You Need to Know
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What Does Under Contract vs Pending Mean in Real Estate
By Prevu Team on May 10, 2022
In real estate, there are two main statuses a property can be in after an accepted offer: under contract and pending.
Both mean the property is expected to be sold, but they have different implications for buyers, sellers, and real estate agents. Understanding the difference between under contract vs pending is important for everyone involved in a real estate transaction.
Below we highlight the key differences so buyers know what to look out for when searching for listings.
What does under contract mean?
When a buyer makes a formal offer on a home and the seller accepts the terms, they are typically said to be "under contract" or "under agreement" depending on where you live.
This means that the buyer and seller have reached an agreement in principle, and the home is now considered to be in escrow. While there are still a few steps that need to be completed before the sale is finalized, it is generally considered to be a done deal.
The buyer's offer will likely be marked as "under contract" or "in contract" in the MLS, and other interested buyers will usually be informed that the home is no longer available. In most cases, the sale will go through without any problems, and the buyer will soon be able to move into their new home.
What does pending sale mean?
When a property is marked as "pending," it means that the property is under contract and that all contingencies have been cleared. A contingency is a condition that must be met in order for the sale to go through. Once all of the contingencies have been met, the property is then considered pending.
This means that the sale is likely to go through, barring any unforeseen circumstances. At this point, the property is typically removed from the market and is no longer available for showings.
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How do you know if a property is pending vs under contract?
Once a seller and buyer have agreed on all the terms of a deal and the seller has accepted the buyer's offer, the listing status will usually be changed from "active" to "under contract" or "pending" by the seller’s agent in the MLS.
When looking at listings online, look for the status of the property. Most real estate sites prominently display the status on each listing and allow you to filter your search results for active for sale listings only.
What does contingent mean?
When a home is listed as contingent, it means that the sale is not yet final. There are several contingencies that can apply to a home sale, but the most common are financing and inspection contingencies.
A financing contingency means that the sale is contingent upon the buyer being approved for a mortgage. An inspection contingency means that the sale is contingent upon the buyer being satisfied with the results of a home inspection. These contingencies are typically valid for a set time period - usually quoted in days.
In both cases, if the buyer is unable to obtain financing or satisfy the inspection contingency, they may back out of the sale without forfeiting their earnest money deposit.
Can you still make an offer on a home if it is under contract or pending?
Yes. Buyers may still make an offer on a home that is under contract or pending, but it depends on the particular transaction.
If the seller has already signed a contract with another buyer, then you would likely be making a backup offer. The seller would only be able to consider your offer if the first buyer backs out for some reason, or if the buyer and seller reach an impasse that legally allows the seller to walk away from the deal.
Before making an offer on a home that is under contract or pending, be sure to consult with a real estate agent to understand the contract implications for the seller.
Interested in buying a home this year? Browse listings in your favorite town and see how much you can save with Prevu's Smart Buyer Rebate .
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Saying “Yes” to Status Changes in Three Business Days Makes the Market Work
Key Takeaways: • Brokers have three business days to update their listing when it moves from one status to another, including Active to Pending and Pending to Closed. • The REcolorado Rules and Regulations Committee increased the fines associated with violations to the MLS Rules, Reporting Status Changes to the MLS. When a violation occurs, the offending broker is fined $50 for the first violation, $250 for the second, and $500 for the third. Repeat offenders will be referred to the committee for further action. • Reminder, these untimely status changes result in an immediate automatic fine and notice.
You count on REcolorado for timely, accurate data about listings across Colorado. Not only does that help you better serve your clients, but it also makes the housing market work!
Importance of Timely Status Changes
Status changes are an important part of the equation. For example, consider a listing changing from Active to Pending. If that change isn’t made in a timely fashion, your client may fall in love with a home they see online, only to have the disheartening revelation that it is already under contract. Having to explain to your clients over and over that the home they found online is no longer available is frustrating for everyone involved.
Making timely status changes is not simply a professional courtesy to fellow brokers. Delaying status changes also impacts housing market statistics, comparables or CMAs, and appraisals, resulting in incomplete or inaccurate data that can skew the picture.
REcolorado customers agree to follow the MLS Rules and Regulations , which includes making status changes in a timely fashion. Brokers have three business days to update the status in REcolorado Matrix when a listing changes from one status to another.
Pro Tip: For even more education and development resources, visit the Listing Input and Edit Learning Path . To learn the ins and outs of statuses in REcolorado’s MLS, register for our class REcolorado Listing Statuses: Define, Accurately Manage, and Remain Compliant Live Online or In-Person
Untimely Status Change = Immediate Fine
Because untimely status changes impact the integrity of the data available in REcolorado Matrix and make it more difficult for all brokers to serve their clients, the REcolorado Data Integrity team takes violations very seriously. Our Customer Success team heard from many of you about the frustration caused by delayed status changes and heard loud and clear that you need more timely data. The REcolorado Rules and Regulations Committee strengthened the rule about status changes, updating Section 1.9 to state:
Reporting Status Changes to the MLS: When the status of a listing changes to Pending, Closed, Leased, Expired/Terminated, Withdrawn or back to Active, it must be reported to the MLS within three business days. Failure to report status changes within 3 business days will result in an immediate untimely status change fine. Per MLS Rules & Regulations Section 8.1 (2) & (3) Repeat Offenders will be referred to the MLS Rules Committee for appropriate further action. Fines for Untimely Status Change violations will be as follows: • First Violation – $50 • Second Violation – $250 • Third Violation – $500 • Repeat Offenses will be referred to the Rules & Regulations Committee for further action
Notices for violations are sent automatically with “Untimely Status Change” in the subject line, and fines are issued immediately. If you have any questions about a notification you received or how this could impact your listing, please contact REcolorado Customer Success or our Data Integrity team to discuss your situation.
Our goal is data integrity for all REcolorado customers so you have continued access to reliable information to best serve your clients.
Note: If you are a subscriber of REALTORS® of Central Colorado (ROCC) or Steamboat Springs Board of REALTORS® (SSBR), you will receive a notice from your REALTOR association with additional information. Please be advised, fees may vary per association.
Comments (12)
I think this is good, however, I see absolutely No reason to keep this “business days”, I think getting rid of business days and making it normal calendar days would be an additional improvement
I agree with Michael. With clients viewing homes 7 days a week, timely information is just as important on weekends as it is on week days.
I agree with the above comments.
Agreed…72 hrs is enough time. Do not need biz days.
Let’s please use “calendar days” instead of “business days”
I think 3 days is too long. should be 24 hrs, or 48 at most.
100% It should happen immediately after closing
One issue to consider if we switch it to calendar days is the fact that earnest money is typically due in 2-3 business days. I and some of my Realtor friends have all had instances where the earnest money did not show up so if you change the status requirement to calendar days & earnest money doesn’t show up, then you now have a “back on the market” and we all know this can impact a listing, not to mention that “consideration” is a piece of having a contract.
I like this change. It seems like a lot of agents in our area really like that to keep listings active until we nearly get to close, then they change it to contingent.
In my opinion in this market 3 days is way too long. This needs to be done within 24 hours, 48 at the most. It only takes a minute to log in and update a status. This is simply a professional courtesy to other agents and the general public. Whether earnest money is received or not has nothing to do with status. It’s either under contract, or it’s not so quit playing that game.
Its about our responsibility to protect our Clients and the assetts they trust us with. Its not difficult to text or call a Listing Agent to confirm availability if showings are blocked. 3 business days as it relates to Earnest Money Deadlines and Title Company hours of operation is strategically smart.
Hi James – thank you for your input! We absolutely agree about your role as a broker to protect and serve your clients. Having timely and accurate data, for you and your colleagues, is critical to serving your clients. Even though brokers have 3 business days per MLS rules, best practice is to make status changes as quickly as possible. Remember, you should not wait for earnest money to be received to change a Listing Status to Pending. The status must be changed within three business days of the mutually executed contract, not the earnest money. Bring the Closing Checklist ( https://cdn.recolorado.com/files/collateral/Closing-Checklist.pdf ) with you to the closing table so you don’t have to wait for the Title Company to get the information you need. To learn more, check out these FAQs on the Pending Listing Status ( https://blog.recolorado.com/faqs-pending-status ) and Closed Listing Status ( https://blog.recolorado.com/faqs-closed-status ) on the REcolorado Professionals Blog.
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FAC Number: 2023-01 Effective Date: 12/30/2022
Part 43 - Contract Modifications
43.000 Scope of part.
Subpart 43.1 - General
43.101 Definitions.
43.102 Policy.
43.103 Types of contract modifications.
43.104 Notification of contract changes.
43.105 Availability of funds.
43.106 [Reserved]
43.107 Contract clause.
Subpart 43.2 - Change Orders
43.201 General.
43.202 Authority to issue change orders.
43.203 Change order accounting procedures.
43.204 Administration.
43.205 Contract clauses.
Subpart 43.3 - Forms
43.301 Use of forms.
43.000 Scope of part.
This part prescribes policies and procedures for preparing and processing contract modifications for all types of contracts including construction and architect-engineer contracts. It does not apply to-
(a) Orders for supplies or services not otherwise changing the terms of contracts or agreements ( e.g., delivery orders under indefinite-delivery contracts); or
(b) Modifications for extraordinary contractual relief (see subpart 50.1 ).
Subpart 43.1 - General
43.101 definitions..
As used in this part-
Administrative change means a unilateral (see 43.103 (b)) contract change, in writing , that does not affect the substantive rights of the parties ( e.g., a change in the paying office or the appropriation data).
Effective date -
(1) For a solicitation amendment, change order , or administrative change, the effective date shall be the issue date of the amendment, change order , or administrative change.
(2) For a supplemental agreement , the effective date shall be the date agreed upon by the contracting parties.
(3) For a modification issued as a confirming notice of termination for the convenience of the Government, the effective date of the confirming notice shall be the same as the effective date of the initial notice.
(4) For a modification converting a termination for default to a termination for the convenience of the Government, the effective date shall be the same as the effective date of the termination for default .
(5) For a modification confirming the termination contracting officer ’s previous letter determination of the amount due in settlement of a contract termination for convenience , the effective date shall be the same as the effective date of the previous letter determination.
43.102 Policy.
(a) Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not-
(1) Execute contract modifications ;
(2) Act in such a manner as to cause the contractor to believe that they have authority to bind the Government; or
(3) Direct or encourage the contractor to perform work that should be the subject of a contract modification .
(b) Contract modifications , including changes that could be issued unilaterally, shall be priced before their execution if this can be done without adversely affecting the interest of the Government. If a significant cost increase could result from a contract modification and time does not permit negotiation of a price, at least a ceiling price shall be negotiated unless impractical.
43.103 Types of contract modifications.
Contract modifications are of the following types:
(a) Bilateral. A bilateral modification ( supplemental agreement ) is a contract modification that is signed by the contractor and the contracting officer . Bilateral modifications are used to-
(1) Make negotiated equitable adjustments resulting from the issuance of a change order ;
(2) Definitize letter contracts; and
(3) Reflect other agreements of the parties modifying the terms of contracts.
(b) Unilateral. A unilateral modification is a contract modification that is signed only by the contracting officer . Unilateral modifications are used, for example, to-
(1) Make administrative changes;
(2) Issue change orders ;
(3) Make changes authorized by clauses other than a changes clause ( e.g., Property clause, Options clause, or Suspension of Work clause); and
(4) Issue termination notices.
43.104 Notification of contract changes.
(a) When a contractor considers that the Government has effected or may effect a change in the contract that has not been identified as such in writing and signed by the contracting officer , it is necessary that the contractor notify the Government in writing as soon as possible. This will permit the Government to evaluate the alleged change and-
(1) Confirm that it is a change, direct the mode of further performance, and plan for its funding;
(2) Countermand the alleged change; or
(3) Notify the contractor that no change is considered to have occurred.
(b) The clause at 52.243-7 , Notification of Changes, which is prescribed in 43.107 -
(1) Incorporates the policy expressed in paragraph (a) of this section;
(2) Requires the contractor to notify the Government promptly of any Government conduct that the contractor considers a change to the contract, and
(3) Specifies the responsibilities of the contractor and the Government with respect to such notifications.
43.105 Availability of funds.
(a) The contracting officer shall not execute a contract modification that causes or will cause an increase in funds without having first obtained a certification of fund availability, except for modifications to contracts that-
(1) Are conditioned on availability of funds (see 32.703-2 ); or
(2) Contain a limitation of cost or funds clause (see 32.704 ).
(b) The certification required by paragraph (a) of this section shall be based on the negotiated price, except that modifications executed before agreement on price may be based on the best available estimate of cost.
(c) In accordance with 10 U.S.C. 983 , do not provide funds by contract or contract modification , or make contract payments, to an institution of higher education that has a policy or practice of hindering Senior Reserve Officer Training Corps units or military recruiting on campus as described at 9.110 . The prohibition in this paragraph (c) does not apply to acquisitions at or below the simplified acquisition threshold or to acquisitions of commercial products , including commercially available off-the-shelf items, and commercial services .
43.106 [Reserved]
43.107 contract clause..
The contracting officer may insert a clause substantially the same as the clause at 52.243-7 , Notification of Changes, in solicitations and contracts. The clause is available for use primarily in negotiated research and development or supply contracts for the acquisition of major weapon systems or principal subsystems. If the contract amount is expected to be less than $1,000,000, the clause shall not be used, unless the contracting officer anticipates that situations will arise that may result in a contractor alleging that the Government has effected changes other than those identified as such in writing and signed by the contracting officer .
Subpart 43.2 - Change Orders
43.201 general..
(a) Generally, Government contracts contain a changes clause that permits the contracting officer to make unilateral changes, in designated areas, within the general scope of the contract. These are accomplished by issuing written change orders on Standard Form 30 , Amendment of Solicitation /Modification of Contract ( SF 30 ), unless otherwise provided (see 43.301 ).
(b) The contractor must continue performance of the contract as changed, except that in cost-reimbursement or incrementally funded contracts the contractor is not obligated to continue performance or incur costs beyond the limits established in the Limitation of Cost or Limitation of Funds clause (see 32.706-2 ).
(c) The contracting officer may issue a change order by electronic means without a SF 30 under unusual or urgent circumstances, provided that the message contains substantially the information required by the SF 30 and immediate action is taken to issue the SF 30 .
43.202 Authority to issue change orders.
Change orders shall be issued by the contracting officer except when authority is delegated to an administrative contracting officer (see 42.202 (c)).
43.203 Change order accounting procedures.
(a) Contractors’ accounting systems are seldom designed to segregate the costs of performing changed work. Therefore, before prospective contractors submit offers , the contracting officer should advise them of the possible need to revise their accounting procedures to comply with the cost segregation requirements of the Change Order Accounting clause at 52.243-6 .
(b) The following categories of direct costs normally are segregable and accountable under the terms of the Change Order Accounting clause:
(1) Nonrecurring costs ( e.g., engineering costs and costs of obsolete or reperformed work).
(2) Costs of added distinct work caused by the change order ( e.g., new subcontract work, new prototypes, or new retrofit or backfit kits).
(3) Costs of recurring work ( e.g., labor and material costs).
43.204 Administration.
(a) Change order documentation. When change orders are not forward priced, they require two documents: the change order and a supplemental agreement reflecting the resulting equitable adjustment in contract terms. If an equitable adjustment in the contract price or delivery terms or both can be agreed upon in advance, only a supplemental agreement need be issued, but administrative changes and changes issued pursuant to a clause giving the Government a unilateral right to make a change ( e.g., an option clause) initially require only one document.
(b) Definitization.
(1)
(i) Contracting officers shall negotiate equitable adjustments resulting from change orders in the shortest practicable time.
(ii) Agencies shall , in accordance with agency procedures, record and maintain data regarding the time required to definitize equitable adjustments associated with change orders for construction . The definitization of an equitable adjustment begins upon receipt of an adequate change order definitization proposal by the contracting officer , and ends upon the contracting officer 's execution of a contractual action to definitize the change order . The contracting officer shall ensure the data is recorded promptly in accordance with agency procedures. See 36.211 (b).
(2) Administrative contracting officers negotiating equitable adjustments by delegation under 42.302 (b)(1), shall obtain the contracting officer ’s concurrence before adjusting the contract delivery schedule.
(3) Contracting offices and contract administration offices , as appropriate, shall establish suspense systems adequate to ensure accurate identification and prompt definitization of unpriced change orders .
(4) The contracting officer shall ensure that a cost analysis is made, if appropriate, under 15.404-1 (c) and shall consider the contractor’s segregable costs of the change, if available. If additional funds are required as a result of the change, the contracting officer shall secure the funds before making any adjustment to the contract.
(5) When the contracting officer requires a field pricing review of requests for equitable adjustment, the contracting officer shall provide a list of any significant contract events which may aid in the analysis of the request. This list should include-
(i) Date and dollar amount of contract award and/or modification;
(ii) Date of submission of initial contract proposal and dollar amount;
(iii) Date of alleged delays or disruptions;
(iv) Performance dates as scheduled at date of award and/or modification;
(v) Actual performance dates;
(vi) Date entitlement to an equitable adjustment was determined or contracting officer decision was rendered if applicable;
(vii) Date of certification of the request for adjustment if certification is required; and
(viii) Dates of any pertinent Government actions or other key events during contract performance which may have an impact on the contractor’s request for equitable adjustment.
(c) Complete and final equitable adjustments. To avoid subsequent controversies that may result from a supplemental agreement containing an equitable adjustment as the result of a change order , the contracting officer should -
(1) Ensure that all elements of the equitable adjustment have been presented and resolved; and
(2) Include, in the supplemental agreement , a release similar to the following:
Contractor’s Statement of Release
In consideration of the modification(s) agreed to herein as complete equitable adjustments for the Contractor’s _______ (describe) _________ "proposal(s) for adjustment," the Contractor hereby releases the Government from any and all liability under this contract for further equitable adjustments attributable to such facts or circumstances giving rise to the "proposal(s) for adjustment" (except for ____________).
43.205 Contract clauses.
(a)
(1) The contracting officer shall insert the clause at 52.243-1 , Changes-Fixed-Price, in solicitations and contracts when a fixed-price contract for supplies is contemplated.
(2) If the requirement is for services, other than architect-engineer or other professional services, and no supplies are to be furnished, the contracting officer shall use the clause with its AlternateI.
(3) If the requirement is for services (other than architect-engineer services , transportation, or research and development) and supplies are to be furnished, the contracting officer shall use the clause with its AlternateII.
(4) If the requirement is for architect-engineer or other professional services, the contracting officer shall use the clause with its AlternateIII.
(5) If the requirement is for transportation services, the contracting officer shall use the clause with its AlternateIV.
(6) If it is desired to include the clause in solicitations and contracts when a research and development contract is contemplated, the contracting officer shall use the clause with its Alternate V.
(b)
(1) The contracting officer shall insert the clause at 52.243-2 , Changes-Cost-Reimbursement, in solicitations and contracts when a cost-reimbursement contract for supplies is contemplated.
(2) If the requirement is for services and no supplies are to be furnished, the contracting officer shall use the clause with its AlternateI.
(3) If the requirement is for services and supplies are to be furnished, the contracting officer shall use the clause with its AlternateII.
(4) If the requirement is for construction , the contracting officer shall use the clause with its AlternateIII.
(5) [Reserved]
(c) Insert the clause at 52.243-3 , Changes-Time-and-Materials or Labor-Hours, in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated. The contracting officer may vary the 30- day period in paragraph (c) of the clause according to agency procedures.
(d) The contracting officer shall insert the clause at 52.243-4 , Changes, in solicitations and contracts for-
(1) Dismantling, demolition, or removal of improvements; and
(2) Construction , when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold .
(e) The contracting officer shall insert the clause at 52.243-5 , Changes and Changed Conditions, in solicitations and contracts for construction , when the contract amount is not expected to exceed the simplified acquisition threshold .
(f) The contracting officer may insert a clause, substantially the same as the clause at 52.243-6 , Change Order Accounting, in solicitations and contracts for supply and research and development contracts of significant technical complexity, if numerous changes are anticipated. The clause may be included in solicitations and contracts for construction if deemed appropriate by the contracting officer .
Subpart 43.3 - Forms
43.301 use of forms..
(1) The Standard Form 30 ( SF 30 ), Amendment of Solicitation /Modification of Contract, shall (except for the options stated in 43.301 (a)(2) or actions processed under part 15 ) be used for-
(i) Any amendment to a solicitation ;
(ii) Change orders issued under the Changes clause of the contract;
(iii) Any other unilateral contract modification issued under a contract clause authorizing such modification without the consent of the contractor;
(iv) Administrative changes such as the correction of typographical mistakes, changes in the paying office, and changes in accounting and appropriation data;
(v) Supplemental agreements (see 43.103 ); and
(vi) Removal, reinstatement, or addition of funds to a contract.
(2) The SF 30 may be used for-
(i) Modifications that change the price of contracts for the acquisition of petroleum as a result of economic price adjustment;
(ii) Termination notices; and
(iii) Purchase order modifications as specified in 13.302-3 .
(3) If it is anticipated that a change will result in a price change, the estimated amount of the price change shall not be shown on copies of SF 30 furnished to the contractor.
(b) The Optional Form 336 ( OF 336 ), Continuation Sheet, or a blank sheet of paper, may be used as a continuation sheet for a contract modification .
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What does it mean when a house is under contract? Pending? Contingent?
In this article:
After months and months of searching, it finally happens. You’ve found your dream home. But there’s a catch. Whether you scoured a home listing website late at night or you drive by the perfect property on a Sunday morning, it’s disappointing to find out that a home you’re interested in is under contract or pending.
Terms like “under contract” and “pending” tend to imply that the home is sold and off the market, but that actually isn’t the case. If you know whether a house is pending or under contract, you can form a plan for making a bid yourself.
In addition to the question of pending vs. under contract, you may find there are contingencies on the sale of the home that may open the door for you to buy it down the road. So knowing the breakdown of contingent vs. pending or under contract is also important.
We’ll provide insight into what the differences between under contract, pending, and contingent are, what it means for a home for sale to be in these stages, and more key details about the home buying process.
What does it mean when a home is under contract?
When a home is under contract — which is sometimes called “active under contract” — it means that the buyer has made a formal offer on the property and the seller has accepted their offer. While there is a good chance the sale will go through, if your dream home is under contract, you don’t have to necessarily give up hope. We’ll explain why in a minute.
What does pending mean in real estate?
For a home to be listed as pending, that means the home is under contract and there are no longer any contingencies on the sale. Once a property is listed as pending, the home is much closer to actually being sold than when it’s under contract.
What’s the deal with contingencies?
If a home is listed as being a contingent sale , that doesn’t mean the home is sold or an offer has been made. Instead, it refers to the sale of the home being dependent on a contingency working out. Both sellers and buyers can come to the table with contingencies that are required for the sale to go through (such as the buyer selling their current home first ).
You may see a home listed as being both a contingent sale and under contract. The good news for someone who wants to buy a home that is already under contract is that if there are contingencies in place, there is a better chance the sale won’t go through.
Related: What does active contingent mean?
How does the real estate transaction process actually work?
It’s hard to conceptualize what these different sales terms mean if you aren’t familiar with what it takes to buy a home. This brief overview will give you an idea of how the process works and what order each of these statuses come into play.
Step 1: The buyer tours homes and finds one they want to make an offer on.
Step 2: The buyer makes a formal offer in writing, and they may agree to contingencies put in place by the seller or set their own.
Step 3: The seller considers the offer.
Step 4: Negotiations may ensue at this point.
Step 5: The seller accepts the offer (if all goes well).
Step 6: The seller and buyer sign a contract (that will be contingent on certain factors such as inspection results) — the home is now under contract .
Step 7: The buyer’s earnest money will be deposited into an escrow account.
Step 8: The buyer applies for a mortgage .
Step 10: The home will go through an inspection and appraisal — you are now at the sale pending stage .
Step 11: The deal will close .
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If you see a house at this stage, is it too late to buy the home?
Not necessarily, especially when you take this fact into consideration: Real estate agents may use these status terms interchangeably if their multiple listing service (MLS) doesn’t have a tag for the applicable status.
When you come across a home on an MLS, you can’t always take its current status at face value. It’s always worth asking your real estate agent to confirm the home’s status with the listing agent.
If the home is listed correctly, here’s what your chances are of being able to buy a home that is under contract or pending. Remember, just because a home is contingent, doesn’t mean it has an offer — just a contingency placed on it for the sale to go through.
- Under contract : Can a house under contract be sold to someone else? Yes. Unless there is a clause in the contract between the seller and prospective buyer that doesn’t allow the seller to accept backup offers or continue to sell the home, then it’s definitely worth inquiring about the home. The sale of the home isn’t a done deal at this point and could fall through.
- Sale pending : This one’s a maybe. Once a sale is pending, the sale is pretty close to done. Some seller’s agents won’t want to accept additional offers at this point since their original deal is likely to go through. However, it can’t hurt to give them your contact info in case the sale does fall through.
In either case, there’s no harm done if you reach out to inquire about if you can make an offer on a home that is under contract or pending. The worst they can say is no and in the best case, you may be the first one they contact if the first sale doesn’t work out.
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How to buy a house under contract
If a house is under contract, but you’re set on making an offer, your real estate agent will walk you through how to buy a house under contract. For some background information, here’s what the process generally looks like.
Step 1. Put your agent to work
Ask your real estate agent to speak to the listing agent to find out if they are accepting backup offers at this stage of the game. Your agent should be able to get a feel for if the deal is expected to go through or not. If they are open to backup offers, have your agent inquire as to what their ideal offer is so you can make a competitive one.
Learn more about finding a real estate agent
Step 2. View the home
Let’s slow down for a moment. If at all possible, before you make an offer on the home, try to arrange to view the home. Photographs don’t tell the whole story. When you’re eager to squeeze in an offer in case the current one falls through, you may think agreeing to not see the home in real life is worth it, but it’s not. If the seller wants your offer as a backup, they should agree to let you come see the home.
Step 3. Make a competitive offer
Now that you know what the seller wants in an offer, such as a rent-back deal or a contingency that the sale can’t go through until they buy a new home, you can create a competitive offer. If you can accommodate the seller’s needs and can meet the price of their last offer, you’ll be in good shape. On your end, not having any contingencies will help a lot, although you should only agree to a sale that you’re fully comfortable with.
Learn more about making an offer on a house
Step 4. Write an offer letter
Including a personal offer letter alongside your offer that outlines why you want to buy their specific home is an extra special touch that goes a long way. If you can pull on the seller’s heart strings, you may stand out from other very similar backup offers. Of course, a personalized letter about why you love their home won’t be able to compete with a strong financial offer, but if you’re on equal footing otherwise, it can push the seller in your direction.
Now that you know what these different terms mean, you can move more confidently when you finally find a home you love, even if an offer has already been made. Remember: It never hurts to ask.
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A contract is important because it can be used in the legal system to ensure that both parties of an agreement are equally compensated for their work, goods or money. Contracts are legal agreements that may or may not be written.
Change is important in business as it enables a company to meet the dynamic needs of its customers and create growth opportunities. Change also allows a business to keep up with advancing technology and respond to different economic conditi...
A physiological change is a change in the normal function of a living organism. An example of a physiological change is the everyday shedding of dead skin cells in humans. Physiological changes are part of life and may be caused by internal...
Changes to a contract occurs when one or both parties make adjustments to a legally-binding agreement and this can be done either in writing or verbally.
While the property is still under contract, all contingencies must be met before the sale is finalized. That may mean the buyer must secure financing, the home
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What does it mean when a home is under contract? What does pending mean in real estate? What's the deal with contingencies? How does the real