What Does Under Contract Mean in Real Estate?


When a home is listed as active under contract, it means that the seller has accepted an offer from a buyer, but the transaction has not yet closed. This is a relatively early stage in the process and it may take weeks to reach the point where the sale is formally considered “closed.” This is because there are usually a number of contingencies that must be met before a sales contract can be finalized. These include home inspections, financing contingencies, appraisals, and title insurance searches.

It is important for potential homebuyers to understand what does under contract mean when browsing real estate listings. This nuanced phase in the home sales and closing process signifies a commitment from both parties to work toward a successful sale, but it is still dependent on a few key factors falling into place. The seller will typically not accept another offer on the property while it is under contract, and buyers are generally required to submit earnest money (usually 1% to 3% of the purchase price) to show their seriousness about the sale. Also read https://www.creatingrealestatesolutions.com/we-buy-houses-florida/

If any of the contingencies are not met in a timely manner, then the contract can be canceled by either party without penalty. This is why it is important for both parties to communicate well throughout this phase of the sales process and ensure that all necessary steps are taken in a timely fashion.

When a seller is under contract, they can no longer display the listing as available for sale in the Multiple Listing Service (MLS). This gives the buyer exclusivity over the property and prevents them from agreeing to a separate contract with another party. It also means that the property is no longer being actively marketed, so it may not be as easy to find by potential buyers.

While the term under contract is fairly straightforward, there are some nuances to the sale and closing process that can be confusing for first-time homebuyers. The Prevu Real Estate team has broken down what does under contract mean so that prospective buyers can better understand the sales and closing process.

Understanding the difference between a pending sale and under contract can make it easier for homebuyers to navigate the market. Both indicate that a home is likely to close soon, but they have different implications for the entire process. The real estate team at Prevu is here to help you navigate the housing market and find your perfect home. Contact us today to get started. We can match you with a trusted lender and walk you through the mortgage approval process. We look forward to hearing from you!


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