What Does “Under Contract” Mean in East Bay Real Estate?

Buying or selling a home in the East Bay—encompassing cities like Oakland, Berkeley, Walnut Creek, and beyond—can be a fast-paced experience. If you’re exploring online listings or driving around looking for “For Sale” signs, you may see a home labeled as “under contract.” But what does that term really mean, and how does it impact your next steps? Let’s dive into the details of what it means when a property is under contract in the East Bay real estate market.

1. “Under Contract” Defined

• Basic Meaning: A home labeled “under contract” indicates that a buyer’s offer has been officially accepted by the seller. Both parties have signed a purchase agreement, but the sale isn’t final yet.
• Binding Agreement: The seller usually can’t accept new offers unless the deal falls through or certain contingencies aren’t met.
• Buyer’s Obligations: The buyer typically puts down an earnest money deposit, demonstrating their commitment to move forward under the agreed-upon terms.

2. The Contingency Period

• Inspections & Appraisals: Common contingencies involve home inspections (e.g., general, pest, roof) and appraisals. In older East Bay neighborhoods like Rockridge or Albany, these can uncover issues such as foundation concerns or outdated wiring.
• Financing: A financing contingency protects the buyer in case their mortgage isn’t approved. Given East Bay’s competitive market and higher price points, some buyers shorten or waive this contingency—but that comes with added risk.
• Negotiation Window: If inspections reveal problems or the appraisal comes in low, buyers and sellers often negotiate repairs, credits, or a lower price.

3. How “Under Contract” Affects Buyers

• Limited Availability: Once a home is “under contract,” it’s essentially off the active market, though some sellers accept backup offers.
• Backup Offers: You can submit a backup offer in case the first deal falls apart. This is common in hot East Bay areas (e.g., Piedmont, Lafayette) where desirable homes receive multiple offers quickly.
• Timeframe to Close: The escrow or closing period typically lasts 21–30 days, but timelines can vary based on contingencies and lender requirements.

4. Steps for the Seller

• Due Diligence: Sellers must accommodate inspections or appraisals during the contingency window.
• Negotiating Repairs: If major repairs are uncovered, sellers can agree to fix them, offer a repair credit, or negotiate further with the buyer.
• Awaiting Contingency Removal: Once contingencies are removed, the sale proceeds toward closing—assuming everything goes smoothly with the buyer’s financing.

5. When “Under Contract” Becomes “Sold”

• Contingency Removal: After all contingencies are satisfied or waived, the contract is less likely to fall through.
• Final Walkthrough & Closing: The buyer typically does a final walkthrough before signing final documents. Once closing documents are signed and funds are transferred, the property is officially “sold.”
• Recording with the County: In California, a home is deemed sold once the deed is recorded at the county recorder’s office—at that point, the keys can change hands.

Conclusion
In East Bay real estate, “under contract” means the buyer and seller have a formal agreement in place, but there’s still work to be done—inspections, appraisals, and financing approvals—before the deal is finalized. Whether you’re a potential buyer looking at backup offer strategies or a seller preparing for contingencies, understanding this phase is crucial to a smooth transaction.

If you need guidance navigating the local market—from Oakland to Walnut Creek—contact us for personalized advice. We’re here to make your East Bay real estate journey as seamless as possible.