Compare “For Sale,” “Sold” & “Under Contract” Signs
In our area real estate signs say For Sale, Sold and Under Contract. These signs are a shorthand way to explain the contract status of the property — information which may suggest that the property is off the market, on the market or maybe both.
For Sale
It might seem that a property which is “for sale” is, well, being offered to the public for purchase. Actually, the sign has a somewhat different meaning. The owner IS saying that the property is available for sale, however it’s the buyer who is expected to bring in an offer. Once received, the owner may then accept, reject or counter the offer.
In other words, the sign and a price from the owner are an invitation to bid — it’s the buyer who actually makes the offer. This is why a home can be sold above the offering price even if another buyer makes a full-price offer.
Under Contract
In this case the owner has received an accepted an offer. Since there has been offer and acceptance it might seem as though we have a done deal, a contract. However, virtually all real estate offers are contingentoffers, meaning that each party is committed to the transaction IF certain conditions are met. The buyer might want a home inspection, appraisal, financing or some other requirement which must be satisfactory to him or her. The seller might want a certain deposit amount, quick loan application or other requirement. If the conditions are not met then, usually, the deal is off and the buyer’s deposit is returned.
Because a home “under contract” has not actually been sold — and because some percentage of contracts fall through — the owner of a home under contract may be willing to accept a back-up offer. If the first offer falls through then the owner will consider a back-up instead.
Sold
A sold sign means the deal is done and title has changed hands. This sign should only go up after closing has been completed, though absolutists might argue that a “sold” sign is only right after property records have actually been changed.
With a sold sign, if you want to buy the property you need to speak with the new owner.
Offers, contracts and back-up offers are all complex. Be sure to get help from a licensed real estate broker, attorney or legal clinic before signing such paperwork.
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