Understanding Active Under Contract in Real Estate Listings
What “Active Under Contract” really means and how to use it to spot hidden buying opportunities.
Austin Beverigde
Tennessee
, Goliath Teammate
When searching for a new home, you may come across listings marked as "Active Under Contract." This term can be confusing, especially if you're eager to make an offer. Understanding what it means can save you time and help you navigate the buying process more effectively.
Quick Answer: "Active Under Contract" means that a seller has accepted an offer on their property, but the sale is not yet finalized. The listing is still active, allowing other interested buyers to see it. However, the seller may still be open to backup offers until the sale is officially closed.
What Does Active Under Contract Mean?
In real estate, the term "Active Under Contract" indicates that a property is still on the market even though the seller has accepted an offer. This status shows that the property is pending, but the sale has not yet been completed. It allows potential buyers to remain informed about the property while also giving the seller the opportunity to consider backup offers.
How It Works
When a seller accepts an offer, they typically enter into a contract with the buyer. However, various conditions must be met before the sale can close, such as inspections, appraisals, and financing approvals. During this period, the property remains listed as "Active Under Contract," indicating that while a buyer is in place, the deal is not yet sealed.
Why Is This Status Important?
Understanding the "Active Under Contract" status is crucial for buyers for several reasons:
It helps you gauge competition in the market.
It indicates that the property is still open to backup offers.
It provides insight into the seller's activity and urgency.
Real-Life Examples
Scenario 1: The Eager Buyer
Imagine you're a buyer who finds a home you love listed as "Active Under Contract." You might feel discouraged, thinking the opportunity is lost. However, knowing that the seller is still open to backup offers means you can submit your own offer, just in case the first buyer's deal falls through.
Scenario 2: The Cautious Seller
A seller might list their property as "Active Under Contract" after accepting an offer but still wants to keep the listing active. This way, if the buyer's financing falls through, the seller has backup offers ready to consider, minimizing the time the property is off the market.
Checklist for Buyers
Check the listing regularly for updates.
Consider submitting a backup offer if interested.
Stay informed about the buyer's contingencies.
Consult your agent for insights on the property's status.
Be prepared to act quickly if the deal falls through.
Common Mistakes to Avoid
When navigating properties labeled as "Active Under Contract," buyers often make several common mistakes:
Assuming the property is no longer available without confirming.
Not submitting a backup offer when interested.
Ignoring the possibility of the deal falling through due to contingencies.
Failing to communicate with their agent about ongoing interest.
Overlooking similar properties that may still be available.
Frequently Asked Questions
1. Can I make an offer on a property that is Active Under Contract?
Yes, you can submit a backup offer on a property that is labeled as Active Under Contract. The seller may consider your offer if the current buyer's deal falls through.
2. How long can a property stay Active Under Contract?
The duration a property remains Active Under Contract can vary based on the terms of the contract, typically lasting until all contingencies are met or the sale is finalized.
3. What happens if the current buyer backs out?
If the current buyer backs out, the seller can accept your backup offer if it’s still valid, allowing you to proceed with the purchase.
4. Should I keep looking at other properties if I’m interested in one that’s Active Under Contract?
Yes, it’s wise to continue looking at other properties. The deal on the Active Under Contract property may not go through, and you don’t want to miss out on other opportunities.
5. How can I find out the status of an Active Under Contract property?
You can check with your real estate agent or look at the listing online for updates. Agents often have the most current information regarding the status of the property.
