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Proceed with Caution: Things to Avoid When “Under Contract” on a Home Purchase

Congratulations! You’ve successfully secured a home and are “under contract.” This means you’re one step closer to closing the deal and becoming a homeowner. However, it’s crucial to navigate this final stage carefully. Certain actions or decisions can potentially jeopardize the home buying process and even lead to complications. In this blog post, we will discuss some common mistakes to avoid when you’re “under contract” on a home purchase to ensure a smooth and successful closing.

Making Large Purchases or Opening New Lines of Credit:
When you’re under contract, it’s essential to maintain financial stability. Avoid making any significant purchases, such as buying a new car or furniture, and refrain from opening new credit cards or taking on additional loans. These actions can affect your debt-to-income ratio and financial status, potentially raising concerns for lenders. Wait until after the closing to make such decisions to maintain the integrity of your loan approval.

Not Meeting Contingency Deadlines:
A typical contract contains contingencies, including inspections, financing, and appraisal. Failing to meet these contingency deadlines can put your purchase agreement and earnest money at risk. Promptly schedule inspections, stay in close communication with your lender to ensure there are no unexpected delays in your financing, and respond promptly to the appraiser’s requests. Stay organized and stay on top of these deadlines to avoid any complications.

Changing Jobs or Financial Circumstances:
Lenders review your financial information and employment history during the underwriting process. Changing jobs or experiencing significant financial changes can disrupt the approval process. Lenders value stability, so it’s best to avoid any major career shifts or financial changes until after the closing. If an unexpected job change occurs, communicate promptly with your lender to determine the best course of action.

Neglecting Your Due Diligence:
Throughout the under contract period, it’s essential to conduct thorough due diligence. This includes reviewing HOA documents (if applicable), researching zoning regulations, and obtaining homeowners insurance quotes. Neglecting such tasks can lead to surprises or issues post-closing that could have been addressed beforehand. Take the time to gather the necessary information and ensure you’re fully informed about your potential purchase.

It’s important for both buyers and sellers to consult with a real estate attorney or seek professional advice from a qualified real estate agent familiar with local laws and regulations to fully understand their rights and options in the event of a loan denial resulting from buyer negligence. Each situation is unique, and the specific outcomes can only be determined after reviewing the contract and considering the circumstances in detail. When it comes to due diligence, possible repercussions can include forfeiture of earnest money.

Poor Communication or Ignoring Advisors:
Open and honest communication is crucial during the under contract phase. Stay in regular contact with your real estate agent, lender, and attorney (if applicable), ensuring everyone is up to date on the progress of the transaction. Ignoring important advice or suggestions from these professionals can be detrimental. Trust their expertise and be proactive in seeking their insights to avoid any pitfalls.

Making Drastic Changes to Your Finances:
Maintaining financial stability is paramount during the home buying process. Avoid making substantial changes to your financial situation, such as moving large sums of money between accounts or changing your down payment source. Such actions can raise red flags with lenders and may necessitate additional scrutiny or delay the closing.


When you’re “under contract” on a home purchase, it’s crucial to proceed with caution and avoid certain actions that may jeopardize the closing process. By refraining from making significant purchases, meeting contingency deadlines, maintaining financial stability, conducting due diligence, communicating effectively, and seeking advice when needed, you can ensure a smooth transition from contract to closing. Remember, this last phase requires diligence, patience, and adherence to the agreed-upon terms to successfully fulfill your homeownership dreams.

By Bryson Smith Team Administration I Jun 30

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