"Bought it on contract" - what does this actually mean?

[Tyler Jordison]

Hi All, 

I have listened to podcast after podcast and so many guests quickly and easily always say "I bought it on contract", "I got it under contract", and other such versions. I don't really understand the intricacies of this statement. I know it allows you as the investor to close quick on a deal where the seller is trying to get out, without waiting the 45 days to close on a conventional loan, but that's about the extent of my knowledge on the subject.

Few specific questions - who writes up the contract, what does the contract entail, when is money exchanged... sort of the basics of buying on contract. I tried to look for this on the forums with no luck, if there is a good thread somewhere I would appreciate if somebody could point me to it. 

Thanks so much!