Understanding the Meaning of "Zillow Under Contract"
Zillow under contract is a term frequently encountered in real estate transactions, especially for those using Zillow as a platform to buy or sell homes. When a property is listed as "under contract" on Zillow, it indicates that the seller and the buyer have reached an agreement, and the property is in the process of moving toward closing. This status signals that the property is no longer available for other offers, but the transaction has not yet been finalized. Understanding what "under contract" entails, how it differs from other statuses, and what it means for buyers and sellers is crucial for anyone involved in real estate transactions.
What Does "Under Contract" Mean in Real Estate?
Definition of "Under Contract"
In real estate, "under contract" refers to a property that has an accepted purchase offer and is in the process of closing the sale. Once an offer is accepted by the seller, the property status on platforms like Zillow updates from "for sale" to "under contract." This status indicates that the buyer and seller have entered into a binding agreement, contingent on certain conditions being met, such as inspections, financing, or appraisal.
Implications of "Under Contract" Status
- The property is no longer actively accepting offers from other buyers.
- The sale process is underway, but the transaction is not yet finalized.
- Potential buyers should understand that the property may become unavailable if the current deal falls through.
- Buyers interested in the property should act quickly or consider backup offers if possible.
Stages of a Real Estate Transaction Leading to "Under Contract"
1. Listing and Marketing
The seller lists the property on platforms like Zillow, often with a price, photos, and property details. Marketing efforts help attract potential buyers.
2. Offer and Negotiation
A prospective buyer submits an offer, and negotiations ensue until both parties reach an agreement, including price, closing date, and contingencies.
3. Acceptance and Contract Signing
Once both parties agree, they sign a purchase agreement, formalizing the deal. The property status on Zillow then updates to "under contract."
4. Due Diligence and Contingencies
This phase includes inspections, appraisal, financing approval, and other contingencies. The buyer completes necessary inspections and secures financing.
5. Closing
After all conditions are met, the transaction proceeds to closing, where ownership transfers, and the property officially changes hands.
Difference Between "Under Contract" and Other Statuses
For Sale
Indicates the property is actively available for purchase and accepting offers. Buyers can submit offers, and negotiations are ongoing.
Pending
In some regions, "pending" means the sale is close to closing, and all contingencies have been satisfied. The property is very unlikely to accept new offers.
Sold
The sale has been finalized, and ownership has transferred to the new buyer. The listing is closed.
Under Contract vs. Pending
- Under Contract: The property has an accepted offer, but the sale may still be contingent on inspections, financing, or other conditions.
- Pending: All contingencies are typically satisfied, and the transaction is nearing completion.
What Does "Zillow Under Contract" Mean for Buyers?
Understanding the Buyer’s Perspective
For potential buyers, seeing a property marked as "under contract" on Zillow can be disappointing but also provides valuable information about market activity. It signifies that the property is no longer available for new offers but may still fall out of escrow if contingencies are not met or issues arise.
Options for Interested Buyers
- Submit a Backup Offer: Some sellers accept backup offers in case the primary deal falls through. This can give you priority if the current deal fails.
- Monitor the Property: Keep an eye on the listing for updates. Sometimes properties go back on the market if deals do not close.
- Look for Similar Properties: Use the "under contract" status as an indicator of high demand and consider other comparable homes.
Importance of Due Diligence
Buyers should perform thorough due diligence during the escrow process, including inspections, appraisals, and securing financing, to ensure the deal proceeds smoothly.
What Does "Zillow Under Contract" Mean for Sellers?
Significance for Sellers
For sellers, an "under contract" status indicates that a buyer has made an acceptable offer and that the property is in escrow. This status provides reassurance that the property is close to finalizing a sale, though it remains contingent on fulfilling specific conditions.
Next Steps After Going Under Contract
- Coordinate with escrow and title companies to prepare for closing.
- Address any remaining contingencies, such as repairs or inspections.
- Stay in communication with the buyer and real estate agents to resolve any issues that arise.
Potential Risks and Challenges
- Deals can fall through if contingencies are not met or if financing is denied.
- Unexpected issues during inspections may lead to renegotiations or cancellations.
- Market fluctuations or buyer withdrawal can impact the transaction.
How Long Does a Property Typically Remain "Under Contract"?
The duration a property stays "under contract" varies based on several factors, such as market conditions, type of property, and the complexity of contingencies. Generally, escrow lasts between 30 to 60 days. However, delays can occur, extending this period. It's essential for both buyers and sellers to stay informed and maintain open communication during this phase.
Can a Property Go Back on the Market After Being "Under Contract"?
Yes, a property can return to active status if the deal falls through. Common reasons include:
- Failure to meet contingencies (e.g., inspection issues, financing problems).
- Buyer's withdrawal or inability to secure funding.
- Legal or title issues discovered during due diligence.
In such cases, the property may be relisted as "for sale" or "back on market," allowing new offers from prospective buyers.
Conclusion
Understanding the meaning of "Zillow under contract" is vital for anyone involved in real estate transactions. It signals that a property has an accepted offer and is progressing towards closing but has not yet finalized the sale. For buyers, it offers insight into market activity and potential opportunities for backup offers. For sellers, it signifies that their property is close to closing but still requires careful management of remaining steps. Overall, "under contract" status is a crucial phase in the home buying and selling process, embodying progress and anticipation in real estate dealings.
Frequently Asked Questions
What does 'under contract' mean on Zillow?
When a property is marked as 'under contract' on Zillow, it indicates that the seller has accepted an offer from a buyer, and the property is in the process of closing, but the sale has not yet been finalized.
Can a property marked 'under contract' still be viewed or purchased?
Typically, properties under contract are not available for viewing or offers, but in some cases, they may go back on the market if the deal falls through. Always confirm with the listing agent for the latest status.
How long does a property usually stay 'under contract' on Zillow?
The duration varies depending on the sale process, but it generally lasts from a few weeks to a couple of months, depending on contingencies, inspections, and financing.
Does 'under contract' mean the property is no longer available?
Yes, generally 'under contract' indicates the property is no longer actively available for offers, but it may return to the market if the deal falls through.
Can I still negotiate on a property that's 'under contract'?
Usually, negotiations are halted once a property is under contract, but in some cases, buyers can negotiate if the current deal doesn't close or if the status changes to 'back on market'.
What should I do if I’m interested in a property marked 'under contract' on Zillow?
If you're interested, contact the listing agent to inquire about the status and whether the property might become available again, or ask about similar properties that are available for sale.
