What Does “Under Contract” Mean in the Central Valley?

California’s Central Valley—spanning cities like Stockton, Modesto, Fresno, and parts of Sacramento—offers a variety of housing opportunities. As you search for the perfect place, you might notice some listings marked “under contract.” So, what exactly does that mean for buyers and sellers, and how does it affect the path to closing? Let’s break it down in the context of the Central Valley real estate market.

1. Defining “Under Contract”

• Accepted Offer: A home is under contract when a seller accepts a buyer’s offer, and both parties sign the purchase agreement.
• Pending Steps: The sale isn’t final yet; several contingencies (like inspection, appraisal, and financing) must be met.
• Earnest Money: Buyers typically deposit earnest money to show serious intent in moving forward.

2. Common Contingencies in the Central Valley

• Inspection: Homes in agricultural regions might need extra checks for well water, septic systems, or irrigation setups—particularly in rural properties around Turlock or Merced.
• Appraisal: If a property in Elk Grove or Roseville gets multiple offers, it might sell above asking, requiring an accurate appraisal to justify the price.
• Financing: USDA or FHA loans are common here; a financing contingency gives buyers a way out if the loan falls through.

3. What It Means for Buyers

• Off the Market: Once a property is under contract, it’s generally considered off the market. Other offers may be considered “backup” in case the initial deal fails.
• Backup Offer Strategy: If you love a property that’s under contract, submitting a backup offer can position you as the next in line.
• Timeline: The escrow period usually ranges from 21 to 30 days, but can extend if additional inspections or repairs are needed.

4. Seller Responsibilities

• Inspection Coordination: Sellers must allow inspections and possibly negotiate repairs or credits if issues arise.
• Contingency Management: Be prepared to address appraisal differences or buyer financing delays.
• Sale of Home Contingency: Some buyers might have to sell their current home first. This can extend timelines, but each scenario is unique.

5. Transition from “Under Contract” to Closing

• Contingency Removal: Once inspections, appraisal, and financing are cleared, the buyer removes contingencies—making the deal more solid.
• Final Sign-Off: The closing phase involves signing legal documents and transferring funds.
• Recording: In California, the sale is official once the deed is recorded at the county recorder’s office, at which point the buyer gets the keys.

Conclusion
When a Central Valley home is under contract, it signifies a crucial middle stage: an accepted offer with certain steps still ahead, like inspections and loan approvals. Understanding this phase helps buyers know when a property might re-enter the market (if the deal falls through) and helps sellers navigate contingencies and timeline expectations.

Need guidance on buying or selling in Stockton, Fresno, or any other Central Valley community? Contact us today, and we’ll walk you through every stage of a successful real estate transaction.