Under contract in real estate means the seller has accepted an offer. This becomes a legally binding agreement. This means that both parties are obligated to close the sale unless issues with contingencies cannot be resolved. 

  • Once the buyer and seller sign the house has a binding agreement
  • Contingencies must be met or removed 
  • It can fall through and sell to another buyer 

A lot can happen with an agreement after the buyer and seller sign. You should not go through this alone, listen to your agent and other professionals, and let them guide you through everything to the closing. 

Know if a House is Under Contract in Real Estate

Most of the time an agent will mark the listing and put up an under contract sign so you can tell if a house is pending. Sometimes, however, they do not update things as quickly as they should. 

  • Realtors update the Multiple Listing Service (MLS) first 
  • Realtor.com and other company sites usually update automatically with the MLS 
  • Yard signs and other physical signs are usually updated last 

If you see a house that you like and want to know its status the best thing to do is call your agent. They should be able to call the listing agent and get a decisive answer about the status. 

Active Under Contract in Real Estate

Active under contract in real estate means that the property has an agreement. Often, though, the seller is not comfortable with it. Probably it contains a contingency, usually a sale and settle clause. 

  • In California, it means the house has a deal but hasn’t gone to pending status yet 
  • In other areas, it indicates the seller has an agreement that they think may fall through 

The most important thing to remember is when an agent lists the house as under contract you cannot buy it unless the primary falls through.1  

Offer on a House Under Contract 

You can make an offer on a house that is under contract. However, it will be a backup. The seller will hold it and sign it if the first deal falls apart. 

  • The seller cannot sign a second agreement while the first is still valid 
  • Primary deals do fall apart because of contingencies 
  • Sellers cannot cancel a primary agreement just because one with better terms comes along 
  • A seller can only cancel if contingencies are not met or removed  

You should talk to your agent about the property and how strong is the deal. If it is weak, then it may be worth the time to submit an offer. Most, though, go through and close. 

Difference Between Pending and Under Contract in Real Estate

Under contract means that a house has a contract while pending sometimes means the same thing it usually means that the parties involved have met all contingencies and the property will close soon. 

  • In some areas the two are synonymous 
  • Pending, in other areas, means that all contingencies are met or removed 

In either case, the seller agreed to sell the house. If you submit an offer it will be a backup.  

House Goes Under Contract in Real Estate

When a house goes under contract in real estate the buyer and seller work to meet all contingencies, so they close as quickly as possible. 

  • The buyer pays for the home inspection, and it usually turns up issues that require negotiation 
  • Banks require appraisals to make sure the home’s value is consistent with its value. If it’s not, then you will need to negotiate again 
  • A title agency will conduct a title search to make sure that the seller has clear title to the property 
  • The mortgage company must approve the loan and draw up the closing documents 
  • Sellers need to cancel their utilities and move their personal effects out of the house 

As you can see, there is a lot to do once you sign the agreement. Whether you are the buyer or seller you need to work with your agent and other professionals you hired to make sure the process goes smoothly until the closing.2  

After House is Under Contract in Real Estate

After the house is under contract work with your agent to meet all the contingencies as quickly as possible. 

  • Buyers must pay for inspection and submit paperwork for the title and mortgage company 
  • Sellers wait for inspection results, renegotiate or deal with issues that come because of contingencies and deal with moving issues 

There is a lot to do after the paperwork is signed. It takes 30 – 60 days to close on a house because of all the things that need to be done. The best thing for you to do is to follow your agent’s advice. It is their business, and a good one has seen every kind of problem you can imagine, and their job is to work through problems so you can close your deal. 

How long does a house stay under contract? 

A house usually stays under contract 30 – 60 days. The standard closing period is 60 days, but this expands or contracts due to contingency issues. 

  • 30 days is as short as reasonable. These closings usually involve a mortgage. 
  • An issue with an inspection can take longer.  
  • If the house is in foreclosure and the bank has to approve the deal it can take longer than 60 days. 

As you can see many things can change the timeline for closing. Most deals take 60 days from signing to closing. However, some contingency issues can take a long time to resolve. 

Continue to Show House Under Contract 

You can continue to show your house if it is under contract for backup offers. You cannot replace your signed agreement with a better offer without cause, though. 

  • Sellers can nullify the agreement if they cannot agree on contingency negotiations. 
  • The deal will die if the buyer can’t get a mortgage or pay cash. 

Unless there is a cause, you can’t just substitute one deal for another. 

Can a House Under Contract Fall Through? 

A house that is under contract can fall through. How often does this happen? Not very, but anything can happen before the closing. 

  • Contingency issues, especially, the inspection kill deals 
  • Sometimes buyers get cold feet, especially if they lose their deposit 
  • Mortgage issues, such as the buyer’s financial situation changes, can nullify the agreement 

As you can see many things may go wrong. However, while all of these are possible, they don’t happen often. More than 90% of contracts do not fall through, and homes go on to close. 

Can a House Under Contract Sell to Someone Else?  

A house that is under contract can only be sold to someone else if the first agreement falls through. 

  • A signed agreement is a binding legal document 
  • Only violations of the contingencies will nullify the deal 
  • The seller may only sell the house to someone else if the first agreement is nullified 

If you are a buyer, and you are worried about the seller pulling the rug out from under you, you shouldn’t be. You have legal recourse if they do. If you are the seller remember that the buyer put earnest money down on the house, and you have access to that if they walk away without cause. 


  1. Ruby Home  
  2. Eric Stewart Group