What does UNDER CONTRACT mean?
Here is an explanation for what “Pending“ or “under contract” means;
Many home buyers especially ones coming from other states are searching for homes online and are not clear about the home buying process here in NJ
When you see a home as for sale but notice the word, “pending”
Let’s take a look at what actually happened for a home to show up as “pending”
When you submit an offer in NJ, it is done so by your buyer agent, the agent who showed you the property, with a standard contract written by your agent. Prior to writing the offer, you will need to review and sign a seller’s disclosure.
Why? Because the not so obvious condition of the home including the age of roof, hvac, windows etc, will influence the value and what you decide to offer for it!
A seller’s disclosure is a detailed report from the seller ”to the best of their knowledge” about the condition of the home itemized in every category to disclose past issues or problems resolved or unresolved and or the age of everything in the home.
A sample disclosure can be requested by emailing me at Mywishescometrue@icloud.com
When you meet with your agent for the first time, you should be given another disclosure which explains the function of the different types of relationships. For example, buyer agent only represents you, seller agent only represents the seller, dual disclosed agent represents both buyer and seller. This is called a CIS.
Many times a buyer just wants to see the house and does not understand that the person who is showing them the house will be their agent for the entire transaction!
You should really feel good about the experience and expertise of the person who is taking you around to see homes! Often times, buyers find out the hard way that they should have been more selective in choosing an agent to represent them on a transaction of this magnitude.
Once you have signed all of the disclosures, here are some which may also be included;
-Consumer information statement (explains relationship of agent explained above)
-Lead Paint disclosure (if the home was built prior to 1978, the home may have lead based paint.
-Wire Fraud disclosure (advising to never wire any money to anyone requesting it)
Also, You will need to provide your pre approval letter or proof of cash in order to submit an offer on any property in NJ
(Email me at firstname.lastname@example.org to request recommendations of top high level service, seasoned lender who focuses on lowest rates and programs.)
After discussing and reviewing recent comparable sales of similar homes, you will determine a fait price to make your offer. Your buyer agent will now present your offer contract. It should have your terms in it.
Terms such as;
-The closing date
-Price of your offer
-Down payment amount
-Deposit amount which should be a portion of your down payment usually due after you are “under contract”
This contract explains you have a 3 day attorney review period. What does this mean?
Most buyers get confused and think to mean that after 3 days they are stuck with a contract which is not at all the case when submitting an offer.
To be clear, 3 days is the amount of days you have to retain the services of an attorney who will represent your best interests in your transaction.
But we need to agree on a price FIRST!
So by signing this contract, you show, in good faith, that you are serious about your offer and this initiates the negotiation for the terms- price, closing date, deposit amounts etc.
Once both buyer and seller come to an agreement, the contract is signed by the sellers, buyers, and both realtors. Woo hoo! Accepted Offer!
(Accepted offer DOES NOT MEAN PENDING OR UNDER CONTRACT)
If neither buyer or seller retains an attorney within 3 days of this fully executed contract, only THEN it becomes binding.
This almost NEVER ever happens especially if I am your realtor! (You should have an attorney, I insist! ☺️)
Once you retain your attorney, he or she sends an email to the other attorney stating a disapproval of the contract. This gives both sellers and buyers no time limit to add provisions and addendums going back and forth to further protect the best interests of each side. Not 3 days! No limit. Keep in mind, the longer you take to agree to all terms, the longer you are left open to have another buyer swoop in with a better offer! So while you will never rush to agree on details, you should make this process a top priority to get settled asap.
Once both parties with their attorneys go back and forth fully comprehending and agreeing to the ground rules of this transaction, then we say attorney review is concluded and the house is now “ UNDER CONTRACT”
When this happens, you may see the property on internet web sites say “pending”
This is what has gone on if you see a property is “pending” 😅
Once you are under contract, there are many steps to complete which is why you really need to make sure you have a great experienced realtor to be helping you fully understand and get done. ✅ME!
Below is a great check list I provide to my buyers so they feel in control of the process by knowing what to expect. As well as a buyer’s guide also attached as a link below.
The Transaction Steps Check List ✅after accepted offer;
1. Retain an attorney – attorney review process begins. ✅
2. Under contract – deposit due (send fully executed contract to lender handling your new loan application) ✅
3. Schedule and perform home inspection – submit reports as well as repair/credit requests to your attorney- negotiated and resolved completes this process. ✅
4. Give lender the green light to order the appraisal. ✅
5. Satisfy all additional requirements to lender to obtain mortgage commitment. ✅
6. Mortgage commitment received and forwarded to your attorney. ✅
7. Have attorney order survey if necessary. ✅
8. Have attorney order title search (provide title to the lender) ✅
9. Shop home owners insurance- pay one year in full and provide receipt to your lender. ✅
10. Have attorney request receipts and proof all inspection requests if any were performed. ✅
11. Have attorney request a copy of the Certificate of Occupancy from seller and include Fire Certification also. ✅
12. Set a closing date (make sure to acknowledge the Closing Disclosure with your lender 3 days prior to the closing. Also obtain the final number for the certified check to bring to closing table.) ✅
13.Have attorney request final water reading. ✅
14.Call utilities to be transferred to your name. ✅
15. Schedule final walk through of then property usually day of closing. ✅
16. Attend the closing remember to bring the certified check as well as two forms of ID to closing. ✅
17. MOVE IN!!! ✅
As you can see, now that you know all of these many steps, it is imperative to have a very experienced agent to help navigate you through this process. I am that agent! So excited and I look forward to helping you!
Link to Buyer’s Guide 👇
Link to search properties REAL TIME on MLS with me 👇
See you soon!
Always Exceeding Expectations🏠💫
Keller Williams Realty
Direct Cell ☎️ 646-296-6864