“Under contract” means a seller has accepted an offer on a home, and the sale is pending until conditions are met and it closes.
Meaning
Under contract means the seller accepted an offer and both parties signed a purchase agreement. The sale is not final until closing.
Typical timeline
Closing usually follows in 30 to 45 days.
Steps in the period
- Home inspection.
- Appraisal.
- Mortgage underwriting.
- Title search.
Can it fall through
Yes, if contingencies such as inspection, financing or appraisal aren’t met.
Related terms
Pending means contingencies have been removed or are close to complete. Contingent means certain conditions remain.
Under contract in real estate
In real estate, a property is “under contract” when the seller has accepted a buyer’s offer and both have signed the purchase agreement, but the sale has not closed. The status is also called “pending” in some listings, though these terms can mean slightly different things by region.
Contingencies
Many contracts have conditions that must be met before closing:
- Home inspection contingency.
- Appraisal contingency, requiring the home to appraise at or above the price.
- Financing contingency, tied to the buyer getting a mortgage.
- Sale of the buyer’s current home.
- Title review.
Earnest money
The buyer typically deposits earnest money, often 1% to 3% of the purchase price, held in escrow. It is credited at closing, and can be lost if the buyer withdraws without a valid reason under the contract.
Typical timeline
Closing often takes 30 to 45 days from contract for financed purchases, and can be faster for cash deals.
Backup offers
Sellers may still accept backup offers, so if the first deal falls through, the second can proceed.
Why deals fail
About 1 in 20 or more contracts fall through, according to industry data, because of failed inspections, low appraisals, financing issues or title problems.
What to do as a buyer
- Schedule the inspection and appraisal quickly.
- Lock in the mortgage rate.
- Avoid big purchases or new debt that can change loan approval.
- Get homeowners insurance.
What to do as a seller
Keep the home in good condition, respond to repair requests and prepare documents. Seek professional advice from a licensed agent or real estate attorney for your situation.
Contingencies and deadlines
In real estate, “under contract” means the seller has accepted an offer and both sides signed a purchase agreement, but the sale has not closed. The deal typically depends on contingencies: a home inspection period, often 7 to 10 days, a financing contingency, an appraisal contingency, and sometimes a home sale contingency. Buyers deposit earnest money, commonly 1 to 3 percent of the price, which is held in escrow and credited at closing, and can be lost if the buyer defaults without a valid contingency. Closing usually occurs 30 to 45 days after the contract date.
What happens next
Listings may show “active under contract” if the seller still accepts backup offers, or “pending” when contingencies are cleared. Redfin has reported that roughly 1 in 6 US home purchase contracts fall through in recent years, due to failed inspections, appraisals below price, financing problems or buyer cold feet. Buyers should lock in a loan, schedule the inspection promptly and avoid new debt before closing. Sellers can ask for a backup offer. Real estate agents and attorneys help with terms, which vary by state.
Based on data from the National Association of Realtors and Redfin
