What does under contract mean for buyers?

When you start searching for a home, chances are you’ll see a home listed as “under contract” or “actively under contract.” If you find yourself wanting to buy that house, you may be wondering if you can still do it make an offer on a house that is listed as ‘under contract’.

In this Redfin article we tell you exactly what it means when a home is “under contract” and whether you can still make an offer on the home. Whether you’re watching homes for sale in Milwaukee, WIor apartments in Houston, TexasRead on to learn more about contract housing.

What does under contract mean in real estate?

What does it mean when a house is ‘actively 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 it, but contingencies still need to be met before the sale is final. When the transaction is completed, you will see in the status of the property that it has been sold.

While the property is still under contract, all contingencies must be met before the sale is finalized. This may mean that the buyer must secure financing home inspection must still be completed to confirm that the property is free from major defects, or any other conditions that must still be met before the sale can be completed.

Real estate contracts outline a large number of conditions that both the buyer and the seller must meet. If either party fails to meet any of these conditions, the contract may be terminated depending on the terms set forth in the agreement.

What is the difference between under contract and pending?

When there is a building pendingthat means all contingencies have been removed, the requirements have been met, and the house is about to close. In short, a pending property is much closer to sale than a property under contract.

• Under contract: Contingencies still exist, backup offers may be accepted and the closing process is ongoing.
• In progress: All contingencies have been met, backup offers are unlikely to be accepted and closing day is approaching.

Is a house under contract off the market?

If you find the property of your dreams but it’s listed as under contract, it doesn’t necessarily mean you’re out of options. It is still possible that the buyer or seller will not meet any of the conditions necessary for the sale to be final.

Most properties under contract are considered off-market, but the buyer has a certain period of time to meet their obligations. During this period, properties are still marketed but remain in “actively under contract” status until the sale is completed or the transaction is canceled.

Can a seller accept another offer while still under contract?

During this time, the seller may be willing to accept backup offers. A backup offer with particularly favorable terms, such as a higher purchase price or fewer contingencies, has a good chance of being noticed by the seller.

During the subcontract period, anything can go wrong and quite a few homes come back onto the market. A December 2025 Redfin study showed that almost 16.3% of home purchase agreements were canceled. Submitting a backup offer positions you as the next buyer in line if the current contract falls through.

What is a backup offer?

A backup offer is an offer submitted after the seller has already accepted one, putting you next in line if the original deal falls through. Sellers often indicate that they will accept backup offers if they believe the current offer may fall through. Have you fallen in love with a home that is under contract, please contact a real estate agent to immediately explore your options for making a bid.

Frequently asked questions about contract housing

What contingencies may need to be met while under contract?

There are several unforeseen circumstances that could cause the deal to fall through if these are not met during the contract period. The most common are:

• Financing contingencies: This is also called a ‘mortgage contingency’. This gives the buyer the opportunity to back out of the sale if they are unable to obtain a mortgage approval.
• Unforeseen event during home inspection: This allows a buyer to back out of the deal if the home inspection reveals greater damage than expected.
• Unforeseen valuation of the home: This contingency allows the buyer to back out if the home’s appraisal is lower than expected.
• Unforeseen event when selling a house: The buyer’s offer may be dependent on the sale of his current home. If they can’t sell the house within a certain time, they may be able to back out of the current deal.

What are the main reasons why a house sale can fail?

Home inspection issues, financing issues, and appraisals are coming in low are the main reasons why a house sale can fail. Financing and valuation are often linked. A low appraisal can lead to a mortgage lender rejecting the application, because the lender does not want to lend more than the home is worth.

How long is a home usually under contract?

It is common for a home to have a contract of 30 to 60 days, although this can vary based on financing. For example, a cash offer may only be under contract for 15 days.

What happens when a home is under contract?

There are five important steps that take place before the house is sold.

1. Acceptance of the offer: Both parties sign the purchase agreement and the buyer makes a down payment serious money, a good faith deposit of approximately 1 to 3% of the purchase price.
2. Emergency period/closing process begins: During this time, a home inspection will take place, the buyer will apply for a mortgage, and the closing process will begin.
3. Valuation and mortgage approval: The lender will request an appraisal to confirm the value of the property. As long as the appraisal is not lower than the offer price, the mortgage will likely close.
4. Final walkthrough: The buyer will conduct a final walk-through of the home to verify the condition of the home and that any agreed upon repairs have been completed.
5. Closing day: The buyer transfers money, signs the paperwork and the house is officially sold.

Is a home under contract being sold?

No, a home under contract has not yet been sold. It means that an offer has been accepted, but contingencies must be met before the house can be sold. Once the closing day has passed, the home is now ‘sold’.