So You're Under Contract. Now What?
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What exactly are your rights once you go under contract?
Actually, it depends on if you are a seller or if you’re a buyer. First, let’s talk about the seller’s side of things.
One of the first questions sellers ask my team and I is, “Can we take other offers?” As a seller, you can continue to market and show the property. However, any offer you receive after you’re under contract must be accepted as a backup offer.
Another question sellers often ask is, “When will the buyers lose their earnest money? If a buyer walks away, at what point would I receive that earnest money?”
Basically, if the contract is terminated outside of the contingency window, the seller then receives the earnest money deposit as compensation. This period typically begins about three weeks after going under contract.
Now let’s look at the buyer’s side.
Many buyers have a similar question to the first one I mentioned on the seller’s side. They want to know if they have the right to continue shopping around for homes after they’ve gone under contract.
During the due diligence period, buyers are allowed to keep their options open and continue looking at homes. Buyers may even terminate the deal and get back their earnest money, so long as they terminate within the due diligence period.
Another concern of buyers relates to their rights following the home inspection. When repairs and defects are found in a home, buyers have the right to request that the seller repairs them. Alternatively, buyers may also request to be compensated with money taken off the list price so that they can handle the repairs themselves.
However, if buyers are still unhappy even after an issue is remedied, they may cancel the contract.
The questions we’ve answered today are just a few examples of what we hear from buyers and sellers all the time. There are so many other factors that go into any transaction, so it’s incredibly important that you work with someone who has years of experience in real estate.
My team and I have sold over 170 homes this year and have answered thousands of questions for buyers and sellers. We would love to help you too.
If you have any other questions or would like more information, feel free to give me a call or send me an email.