Under Contract Definition
What does it mean when a house is ‘active under contract’? When a home is active under contract it means that a buyer has made an offer on the home and the seller has accepted, but the sale is not yet final. When the transaction is complete, the status of the home will show that it has sold.
While the property is still under contract, all contingencies must be met before the sale is finalized. That may mean 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 that still need to be met in order for the sale to be finalized. Real estate contracts outline many conditions that must be met by both the buyer and seller. If either party fails to meet one of these conditions, the contract is breached and one 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 since 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 of the contingencies are removed, requirements are 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 this time, the seller may be willing to accept backup offers. A backup offer with especially favorable terms, such as a generous offer or waiving 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 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 an offer.
