What Does Under Contract Mean for Buyers?

As you begin your homebuying search, chances are you’ll see a home listed as “under contract” or “active under contract.” If you find yourself wanting to buy that house, you may be wondering if you can still make an offer on a home that’s listed as “under contract.”

In this Redfin article, we’ll tell you exactly what it means when a home is “under contract” and if you can still make an offer on the property. Whether you’re looking at homes for sale in Milwaukee, WI, or condos in Houston, TX, read on to find out more about under contract homes.

What does under contract mean in real estate?

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 contingencies still need to be met before the sale is 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 may be terminated depending on the terms outlined in the agreement.

What’s the difference between under contract vs. pending?

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.

• Under contract: Contingencies are still in place, backup offers may be accepted, and the closing process is underway. 
• Pending: All contingencies are met, unlikely to accept backup offers, and closing day is approaching.

Is an under contract house off the market?

If you find the property of your dreams, but it’s listed as under contract, it doesn’t necessarily mean that you’re out of options. It’s 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 cancelled.

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 higher purchase price or fewer contingencies, has a good chance of standing out to the seller. 

Many things can go wrong during the under-contract period, and a fair number of homes will go back on the market. A December 2025 Redfin study showed nearly 16.3% of home-purchase agreements were cancelled. 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 an offer submitted after the seller has already accepted one, placing you next in line if the original deal falls through. Sellers often state that they’re 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.

FAQs about under contract homes

What contingencies may need to be met while under contract?

There are several contingencies that could cause the deal to fall through if they aren’t met during the under contract period. The most common include:

• Financing contingency: Also called a “mortgage contingency,” this gives the buyer the opportunity to back out of the sale if they aren’t able to obtain a mortgage approval.
• Home inspection contingency: It allows a buyer to back out of the deal if the home inspection reveals more significant damage than expected. 
• Home appraisal contingency: This contingency allows the buyer to back out if the home appraisal comes in lower than expected. 
• Home sale contingency: The buyer’s offer could be contingent upon the sale of their current home. If they’re not able to sell the home in a specified time, they may be able to back out of the current deal.

What are the main reasons a home sale may fall through?

Home inspection issues, financing problems, and appraisals coming in low are the main reasons a home sale may fall through. Financing and appraisals are often connected, as a low appraisal may cause a mortgage lender to reject the application, since the lender doesn’t want to lend more than the home is worth.

How long is a home typically under contract for?

It’s common for a home to be under contract for 30 to 60 days, though this can vary based on financing. For example, a cash offer may only be under contract for 15 days.

What happens while a home is under contract?

There are five key steps that happen before the home is sold. 

1. Offer acceptance: Both parties will sign the home purchase agreement, and the buyer will deposit earnest money, a good-faith deposit that is roughly 1 to 3% of the purchase price. 
2. Contingency period/closing process begins: During this time, there will be a home inspection, the buyer will apply for a mortgage, and the closing process will begin.
3. Appraisal and mortgage approval: The lender will request an appraisal to confirm the home’s value. As long as the appraisal isn’t lower than the offer price, the mortgage will likely be finalized. 
4. Final walk-through: The buyer will take a final walk-through of the home to verify the home’s condition and check that any agreed-upon repairs are complete.
5. Closing day: The buyer will transfer funds, sign paperwork, and the home will be officially sold. 

Is an under contract home sold?

No, an under contract home isn’t sold yet. It means an offer has been accepted, but contingencies need to be met before the home can be sold. Once closing day is completed, the home is now “sold.”

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