we are in contract! a few Qs

I just got the call that we are in contract! yay! DH is convinced that this is going to work out and wants to shout from the rooftops but I am still cautious and don't want to tell people too many specifics.

At this point what can make the sale fall through? Can the sellers change their minds? What if someone offers them a million dollars for the house? Does the house have to appraise for the sales price or for the mortgage amount? I'm pretty sure we will be able to get a mortgage, but haven't looked at homeowners insurance yet.

I know the sellers want to move and I want to be excited but I'm still afraid that something will go wrong!

Re: we are in contract! a few Qs

Re: we are in contract! a few Qs

Until, you sell the property someone CAN come in and offer more. The seller would be obligated to tell you and then give you a chance to counter.

Many hings can make the deal go through. You not getti g a mortgage. Them not getting one for the new house. But don't worry about it. If there is a problem, there is. There is no use worrying about what COULD happen.

My understanding is that if the house appraises for less than you are paying, you have to come up with that extra money. If it appraises for more? Well, that just awesome.

Get a mortgage now. Like now now. We locked in at 4.25 30 days ago. The rates have already gone up. Get a mortgage now. You don't need insurance until, you are closer to closing. We started looking once we knew when the close was, and finalized the insurance 2 days before we closed.

All your feelings are normal, by the way. I had all of them too.

Re: we are in contract! a few Qs

Once the contracts ars signed on both ends no one can make an offer.that is what my realtor told us.....tgat is when tgey stopped showing the house.

Re: we are in contract! a few Qs

Basically, once you are in contact, the house no longer shows as available online and usually isn't shown anymore (although the sellers could keep showing if they wanted to, and take back up offers, but I've never seen that happen). The exception would be a short sale -- if you are in contract on a short sale, it does still show as available online (the status is "PBA" or "pending bank approval").

Once you are in contract on a property, the seller or buyer cannot back out of the deal (i.e, the seller cannot take a higher offer) without breaching the contract UNLESS one of the contingencies specified in the contract occurs. If the buyer is getting financing, there will always be a contingency clause letting the buyer out of the deal if they can't obtain financing (which is why sellers want to see a preapproval letter before they move forward). Part of the ability to obtain financing is the appraisal. If the house doesn't appraise, the seller either needs to come down in price to the appraised value. the buyer needs to kick in more cash (only an option if the buyer is putting at least 20% down and only financing 80% of the purchase price), or the deal is dead.

As a practical matter, what happens if someone breaches the contract? Well, the buyer forfeits the portion of the down payment they put down upon signing the contract. But if the seller breaches, the buyer needs to sue him for breach of contract, which can take awhile. The buyer can ask for damages, but more often with real estate, the buyer wants specific performance (i.e., they want the seller to live up to the contractual terms and sell them the house).

Most traditional (i.e., non-short sale deals) that go to contract eventually close. And for the ones that don't close, 9 times out of 10 it's because the buyer couldn't get financing.

So I would say you can pretty much rest assured you will get the house, if you are in full contract now.