What Does “Under Contract” Mean in San Diego Real Estate?

From the sunny shores of Pacific Beach to the bustling neighborhoods of North Park and Downtown, San Diego real estate often moves at a rapid pace. If you’re scrolling through listings and see a home labeled “under contract,” you may wonder what that entails. Below, we’ll explain what “under contract” means in San Diego, how it differs from “pending,” and what both buyers and sellers can expect during this phase.

1. Meaning of “Under Contract”

• Accepted Offer: A home is under contract once a buyer’s offer is accepted by the seller, and both parties sign a purchase agreement.
• Still Conditional: The deal isn’t finalized yet. Various contingencies—like inspections and financing—must be resolved.
• Earnest Money: Buyers typically provide an earnest money deposit to show good faith.

2. Key Contingencies in San Diego

• Home Inspection: In coastal areas such as La Jolla or Ocean Beach, inspections may pay special attention to salt-air corrosion, water damage, or older infrastructure.
• Financing: Buyers often rely on a financing contingency, giving them an exit if their mortgage loan falls through.
• Appraisal: Properties in popular neighborhoods can sometimes sell above asking price, leading to appraisal gaps that might require renegotiation or extra cash from the buyer.

3. Impact on Buyers

• Reduced Inventory: If a home is under contract, it’s typically off the active market, limiting your pool of available properties.
• Backup Offers: You can submit a backup offer in case the current deal fails—something to consider for highly sought-after areas like Mission Valley or Chula Vista.
• Timeline: The under-contract period (a.k.a. escrow) generally spans 30 days, though it may be shorter or longer depending on contingencies and lender processing times.

4. Next Steps for Sellers

• Inspections & Repairs: You’ll coordinate any buyer-requested inspections and possibly negotiate repairs or credits if issues arise.
• Moving Logistics: If you’re also buying another home, plan your timelines carefully—especially if you need the sale proceeds for your next purchase.
• Deal Security: Once the buyer removes all contingencies, the sale is far more likely to close without last-minute hurdles.

5. From “Under Contract” to “Closed”

• Contingency Removal: After successful inspections, appraisal, and financing approval, the buyer removes contingencies.
• Final Walkthrough: Buyers usually perform a final walkthrough to ensure the property is in the agreed-upon condition.
• Closing: Upon signing final documents and funding the loan, the sale records with the county, and the property officially transfers ownership—hello, new keys!

Conclusion
In San Diego, a property labeled “under contract” simply means both parties have reached an initial agreement, but several steps—like inspections, appraisals, and financing—still need to fall into place before the home is truly sold. Whether you’re a buyer looking for your perfect beach bungalow or a seller aiming for a smooth transaction, understanding the nuances of this phase is crucial.

Have questions about San Diego real estate or want help navigating the buying or selling process? Contact us today. We’re here to support you at every step of your real estate journey in “America’s Finest City.”