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What Does Active Under Contract Mean In Real Estate

In the exciting world of real estate, one term that you may come across is “active under contract.” But what does it actually mean? Well, let me tell you.

When a property is labeled as “active under contract,” it means that an offer has been accepted by the seller, and the buyer and seller are in the process of finalizing the deal. This status is also known as “under contract” or “pending,” indicating that the property is no longer available for new offers but the sale has not yet been fully completed. It’s a critical phase in the home buying process, as it signifies that both parties have reached an agreement and are working towards closing the transaction.

Understanding Active Under Contract in Real Estate

When it comes to real estate transactions, there are a plethora of terms and jargon that can be confusing, especially for those who are new to the industry. One such term is “active under contract.” If you’re in the process of buying or selling a property, it’s essential to understand what this term means, as it can greatly impact your real estate journey.

In simple terms, “active under contract” refers to a property listing that is still considered active on the market despite being under contract. It means that a buyer and seller have agreed on the terms and conditions of the sale, and a contract has been signed. However, the sale has not yet been completed, and there may still be contingencies or conditions that need to be fulfilled before the property officially changes hands.

During this active under contract phase, the property is typically marked as “pending” or “under contract” in real estate listings. It indicates to other potential buyers and agents that an offer has been accepted, but the sale is not yet final. This status helps to manage expectations and prevents others from making offers on the property that may disrupt the existing agreement.

Now let’s dive deeper into the different aspects and considerations of active under contract in real estate.

The Importance of Active Under Contract Status

Understanding the significance of the active under contract status can provide valuable insights for buyers, sellers, and other real estate professionals. Here are some reasons why this status is crucial:

  • Transparency: The active under contract status provides transparency in the real estate market by indicating that a property is no longer available for new offers. This helps prevent confusion and competing offers.
  • Clear communication: By marking a property as active under contract, it allows real estate professionals to communicate the status effectively with their clients, potential buyers, and other parties involved.
  • Buyer’s opportunity: For potential buyers, the active under contract status lets them know that there is still a chance the sale might not go through. This information can be useful if they are interested in making a backup offer or keeping an eye on the property.
  • Seller’s security: Sellers can have peace of mind knowing that their property is under contract and progressing towards a sale. However, they should remain diligent in meeting contingencies and conditions to ensure a successful closing.
  • Agents’ guidance: Real estate agents play a critical role in managing active under contract properties. They provide guidance to their clients and help navigate any challenges or issues that may arise during this phase.

The Role of Contingencies in Active Under Contract

One important aspect of active under contract status is the presence of contingencies. Contingencies are conditions or requirements outlined in the purchase agreement that must be met for the sale to proceed. They protect both the buyer and seller and give them the opportunity to renegotiate or back out of the contract if certain conditions are not satisfied.

Common contingencies include:

  • Financing contingency: This contingency allows a buyer to back out of the contract if they fail to secure suitable financing for the purchase.
  • Inspection contingency: The inspection contingency gives the buyer the right to have the property inspected and request repairs or negotiate the purchase price based on the findings.
  • Appraisal contingency: An appraisal contingency protects the buyer by allowing them to renegotiate or terminate the contract if the appraised value of the property is lower than the agreed-upon purchase price.
  • Title contingency: This contingency ensures that the property has a clear title and protects the buyer from any unforeseen title issues.

During the active under contract phase, it’s essential for both parties to diligently address and fulfill these contingencies within the specified timelines. Failure to do so can potentially lead to the termination of the contract.

Navigating the Active Under Contract Phase

The active under contract phase can sometimes be a delicate and intricate process. Here are some tips for buyers, sellers, and agents to navigate this stage successfully:


  • Stay informed: Keep in close communication with your real estate agent to stay updated on the progress of the transactions and any necessary actions you need to take.
  • Respect the timeline: Ensure that you fulfill all contingencies within the agreed-upon timeframe to avoid potential termination of the contract.
  • Consider backup offers: If you’re interested in the property, discuss with your agent the possibility of making a backup offer in case the current deal falls through.


  • Meet deadlines: Work closely with your real estate agent to meet all the necessary deadlines and contingencies outlined in the contract.
  • Maintain the property: While the property is under contract, continue to keep it in good condition and address any required repairs or maintenance.
  • Prepare for a successful closing: Coordinate with your agent, the buyer’s agent, and any other parties involved to ensure a smooth closing process.

Real Estate Agents:

  • Communicate clearly: Keep all parties informed about the progress and any updates regarding the active under contract property.
  • Coordinate inspections and appraisals: Help facilitate the necessary inspections and appraisals to keep the transaction moving forward.
  • Address concerns promptly: If any issues or challenges arise during the active under contract phase, work proactively to find solutions and keep the deal on track.

In Conclusion

Understanding what “active under contract” means in real estate is vital for anyone involved in buying or selling property. It indicates that a deal is in progress but has not yet reached the final stages of completion. By grasping the significance of this status, you can navigate the process more effectively and ensure a successful transaction.

Whether you’re a buyer, seller, or real estate agent, being knowledgeable about the active under contract phase allows you to make informed decisions, communicate effectively, and manage expectations. Remember to work closely with your real estate professionals and fulfill your obligations to ensure a smooth and successful closing.

External Link

For more information on the real estate contract process, refer to this article on that dives deeper into what happens after you sign a real estate contract.

Frequently Asked Questions

In real estate, the term “active under contract” is commonly used to describe a property that is still listed for sale but has an accepted offer from a buyer. This means that although the property is under contract, the seller is still accepting backup offers in case the current deal falls through. Here are some frequently asked questions about what “active under contract” means in real estate.

1. What is the meaning of “active under contract”?

When a property is listed as “active under contract,” it means that the seller has accepted an offer from a buyer, but the sale is not yet finalized. The property is still actively marketed and can be shown to potential buyers. The status indicates that the seller is open to receiving backup offers.

This status is commonly used in real estate listings to inform both buyers and sellers that there is an accepted offer on the property, but it is not considered sold until all contingencies are met, and the closing process is completed.

2. What happens when a property is marked as “active under contract”?

When a property is marked as “active under contract,” it means that the seller has accepted an offer from a buyer, and they are in the process of completing all necessary steps to close the sale. These steps may include inspections, appraisals, financing arrangements, and other contingencies outlined in the contract.

During this time, the property remains accessible for showings and the seller may continue to accept backup offers in case the current deal falls through. If all goes smoothly, the sale will proceed to closing, and the property will be marked as “sold.”

3. Can I still make an offer on a property that is “active under contract”?

Yes, you can still make an offer on a property that is “active under contract.” In real estate, backup offers are often accepted by sellers to protect their interests in case the current deal falls through. However, it’s important to note that if your offer is accepted as a backup offer, it will only go into effect if the primary offer falls through.

Making a backup offer can be a strategic move for buyers who are interested in a property but want to have a chance at purchasing it if the initial offer fails. It is advisable to consult with your real estate agent to understand the process and ensure that your backup offer is presented correctly.

4. How long does a property typically stay “active under contract”?

The duration that a property stays “active under contract” can vary depending on various factors, including the terms outlined in the contract, the type of financing involved, and any negotiated contingencies. It is common for a property to remain in this status for a few weeks to a couple of months.

During this time, the buyer is working to satisfy any contingencies, such as securing financing, completing inspections, or resolving appraisal issues. Once all contingencies are met, and the closing process is completed, the property will be considered sold, and the status will change to “sold.”

5. What are the advantages of accepting backup offers on a property?

Accepting backup offers on a property can have several advantages for sellers. Firstly, backup offers provide a safety net in case the current deal falls through. This ensures that sellers have a backup option readily available and can proceed with another buyer without having to start the marketing process from scratch.

Secondly, backup offers can create a sense of urgency among buyers. When potential buyers know that there are backup offers in place, they may be more motivated to move forward quickly with their purchase to secure the property. This can potentially lead to a faster closing process and reduces the chances of the property being on the market for an extended period.

When a property is listed as “active under contract” in real estate, it means that the seller has accepted an offer from a buyer but the sale has not yet been finalized.

During this phase, the buyer typically has a period of time to perform inspections, secure financing, and fulfill any contingencies outlined in the contract. If all conditions are met, the property will move from “active under contract” to “pending” or “under contract.” However, if the buyer is unable to meet the requirements, the property may become available again for other buyers.

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