If you’ve been house hunting, you’ve probably come across the term “Active Under Contract” while scrolling through listings. At first glance, it sounds a lot like “sold,” but not so fast—this designation means the deal isn’t done just yet.
So, What Does ‘Active Under Contract’ Actually Mean?
When a home is labeled Active Under Contract, it means the seller has accepted an offer but is still allowing showings and, in some cases, backup offers. Essentially, there’s an agreement in place, but certain conditions (like financing approval, home inspection, or appraisal) still need to be met before the sale is final.
Think of it as a restaurant holding a reservation—you know someone’s supposed to be sitting there soon, but if they don’t show up, that table could open up for someone else.
Does This Mean You Should Ignore the Property?
Absolutely not! If the home is your dream property, it’s worth considering your options. Here’s why:
1. Deals Fall Through More Often Than You Think
Life happens. Buyers get cold feet, financing issues arise, inspections reveal unexpected problems—there are plenty of reasons a home under contract might come back on the market. In fact, according to the National Association of Realtors, around 5% of home sales fall through before closing. That might seem small, but in a competitive market, that’s a significant number of homes re-entering the race.
2. Backup Offers Can Give You an Advantage
Many sellers will accept backup offers, meaning that if the first deal falls through, the seller can go straight to the next best offer without having to relist. If you’re serious about the home, submitting a strong backup offer could put you first in line if things go sideways with the current buyer.
3. You Might Have Negotiating Power
If a seller has accepted an offer but is still allowing showings, it could indicate that they’re not completely confident in the current deal closing. If you’re willing to be flexible and act fast, you might be able to position yourself as a stronger buyer.
How to Proceed If You Love a Home That’s ‘Active Under Contract’
Ask Your Agent to Contact the Listing Agent
Find out if they are accepting backup offers and what contingencies are still in place.
Submit a Backup Offer (If Possible)
Work with your agent to craft a compelling offer that could make you the next in line.
Monitor the Status Closely
Keep an eye on the listing. If the status changes to Pending, it means contingencies have been met, and the home is on its way to closing. If it changes to Back on Market, it’s game on!
Keep Looking at Other Options
While it’s great to be prepared in case this deal falls through, don’t put all your hopes in one listing. Keep searching for other homes that meet your criteria.
Final Thoughts
Seeing “Active Under Contract” on a listing doesn’t mean it’s off the table—it just means there’s a pending deal that might or might not go through. If you’re serious about a home in this status, talk to your real estate agent about making a backup offer or keeping tabs on the transaction. Sometimes patience and persistence pay off, and that dream home might just become yours!
FAQs
How is ‘Active Under Contract’ different from ‘Pending’?
A: ‘Active Under Contract’ means an offer has been accepted, but contingencies are still in place, and the seller may still consider backup offers. ‘Pending’ typically means all contingencies have been met, and the sale is moving toward closing.
Can I still tour a home that’s ‘Active Under Contract’?
A: In most cases, yes! Sellers in this status may still allow showings, especially if they’re open to backup offers.
Should I submit a backup offer?
A: If you’re truly interested in the home, submitting a backup offer is a smart move. It puts you next in line in case the current deal falls apart.
What happens if the home comes back on the market?
A: If the deal falls through, the home will either go back to Active status or be relisted, giving new buyers (and backup offer holders) another shot at making a successful purchase.
