When a home is active under contract, it means that a buyer has made an offer on the home and the seller has accepted it, but the sale is not yet final. When the transaction is complete, the status of the home will change to show that it has sold.
While the property is still under contract, all contingencies must be met before the sale is finalized. This could mean that the buyer must secure financing, the home inspection still needs to be completed to confirm the property is free of serious defects, or other conditions must be met for the sale to proceed. Real estate contracts outline many conditions that must be satisfied by both the buyer and the seller. If either party fails to meet one of these conditions, the contract is breached, and either party may back out of the sale.
Is an Under-Contract House Off the Market?
If a property is listed as under contract, it doesn’t necessarily mean that you’re out of options. It is still possible that the buyer or seller may fail to meet one of the conditions needed for the sale to be final.
Most properties that are under contract are considered off the market, but the buyer has a specified period of time to fulfill their obligations. During this time, properties continue to be marketed but maintain the active under contract status until the sale is finalized, or the transaction is canceled.
Under Contract vs. Pending – What’s the Difference?
When a property is pending, that means that all contingencies have been removed, all requirements have been met, and the home is about to close. Basically, a pending property is much closer to being sold than an under-contract property.
Can a Seller Accept Another Offer While Under Contract?
During the under-contract period, the seller may still be willing to accept backup offers. A backup offer can include especially favorable terms, such as a generous offer or the waiving of certain contingencies. Many things can go wrong during the under-contract period, and a fair number of homes will go back on the market. By putting in a backup offer, you’ll be positioned as the next buyer in line should the current contract fall through.
What is a Backup Offer?
A backup offer is when a home seller has accepted an offer from a buyer but is still accepting offers from other buyers. Sellers may state that they are accepting backup offers if they think the current offer may fall through. If you’ve fallen in love with a home that is under contract, you should get in touch with a real estate agent right away to explore your options for making a backup offer.
Backup offers provide a potential opportunity to buy a home that is already under contract. While there’s no guarantee, it can be a good strategy to secure your position in a competitive market.
Conclusion
Understanding the difference between under contract and pending can help you navigate the real estate market more effectively. If a home is under contract, it may not be the end of the line for you as a buyer—keeping an eye out for potential fall-throughs and having a backup offer in place could make all the difference. Always consult with a knowledgeable real estate agent to ensure you’re making the right moves at every stage of the home buying process.
