The Difference Between Under Offer and Subject to Contract
When it comes to real estate transactions, there are certain terms that buyers and sellers should be familiar with. Two commonly used terms are “under offer” and “subject to contract.” While they may seem similar, there are important differences between the two.
According to Madhu Verma, “under offer” means that a buyer has made an offer on a property, and the seller has accepted it in principle. However, the sale is not yet legally binding, as there are still conditions that need to be met.
In contrast, “subject to contract” indicates that the buyer and seller have reached a legally binding agreement. This means that both parties have signed a contract that outlines the terms and conditions of the sale. The transaction is now in progress, and any further negotiations would require an addendum to the contract.
Understanding the difference between these two terms is crucial for both buyers and sellers. It can help avoid misunderstandings and ensure that all parties are aware of the status of the transaction.
For example, if a property is listed as “under offer,” it means that there is still a possibility that the sale may not go through. The buyer may still be conducting inspections or finalizing their financing. They also have the option to withdraw their offer if they encounter any issues during the due diligence process.
On the other hand, if a property is listed as “subject to contract,” it means that the sale is in progress and both parties are legally bound to complete the transaction. The buyer cannot back out without facing potential legal consequences, and the seller cannot accept another offer.
It’s important to note that these terms may vary depending on the location and real estate practices. For example, in Wisconsin, it’s essential to understand the specifics of a non-solicitation agreement when it comes to real estate transactions.
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In conclusion, understanding the difference between “under offer” and “subject to contract” is crucial in real estate transactions. It’s important to be aware of the specific terms and conditions that apply in each situation. Additionally, being familiar with various agreements and their meanings can help individuals make informed decisions in different aspects of life.