What Does “Active Under Contract” Mean in Real Estate?

Understanding the Implications for Buyers, Sellers, and Investors

If you’re searching for a home or preparing to sell, you’ve likely come across the term “active under contract” in real estate listings. This phrase can be confusing, especially when you’re eager to make a move in a competitive market. What does it really mean? How does it impact your ability to buy, sell, or invest in property?

In this comprehensive guide from YesLoanz.com, we’ll break down everything you need to know about active under contract—from its definition and legal implications to practical tips for buyers, sellers, and real estate professionals. By the end, you’ll be equipped to navigate this crucial stage of the real estate process with confidence.

What Does “Active Under Contract” Mean?
How Is It Different from “Pending” or “Under Contract”?
The Role of Contingencies in Real Estate Transactions
Why Sellers Keep Listings “Active” After Accepting an Offer
Implications for Buyers: Can You Still Make an Offer?
Implications for Sellers: Protecting Your Interests
How Long Does a Home Stay “Active Under Contract”?
What Causes a Home Sale to Fall Through?
Tips for Navigating Active Under Contract Listings
Frequently Asked Questions
Final Thoughts

What Does “Active Under Contract” Mean?

Active under contract is a real estate status indicating that a seller has accepted an offer from a buyer, but the sale is not yet final. The deal is still in progress, with certain conditions—known as contingencies—that must be met before the transaction can close.

“Active Under Contract means a seller has accepted an offer from a buyer, but the transaction is not yet final. There are still contingencies that need to be resolved—such as a home inspection, appraisal, loan approval or the sale of the buyer’s current home.”

During this phase, the property remains “active” on the Multiple Listing Service (MLS). This means:

The seller has agreed to an offer, but
The deal is not guaranteed to close, and
The seller may still accept backup offers, depending on local MLS rules and the specifics of the contract.

How Is It Different from “Pending” or “Under Contract”?

Real estate listings use several terms to describe the status of a property. Here’s how they differ:

Status	Definition	Can Accept Backup Offers?
Active	Property is for sale, open to all offers and showings	Yes
Active Under Contract	Seller has accepted an offer, but contingencies remain; property is still marketed	Yes (usually)
Under Contract	Similar to “active under contract,” but may not be accepting backup offers	Sometimes
Pending	All contingencies have been met; sale is close to closing	No
Sold/Closed	Transaction is complete; property has changed ownership	No

Key Difference:

Active under contract means the deal is in progress, but the seller is still open to backup offers.
Pending means all contingencies have been satisfied or waived, and the property is on track to close. No new offers are accepted.

The Role of Contingencies in Real Estate Transactions

A contingency is a condition that must be met for the sale to move forward. Common contingencies include:

Financing Approval: The buyer must secure a mortgage loan.
Home Inspection: The buyer can request repairs or back out if major issues are found.
Appraisal: The home must appraise for the agreed purchase price.
Title Review: Ensures the property can legally transfer ownership.
Sale of Buyer’s Current Home: The buyer must sell their existing home before closing.

These contingencies protect both buyers and sellers, but they also introduce uncertainty. If a contingency isn’t met, the deal can fall through, and the property may return to the market.

Why Sellers Keep Listings “Active” After Accepting an Offer

Sellers and their agents often keep a property active under contract for several reasons:

Contingency Risk: If the buyer fails to meet a contingency, the deal could collapse. Keeping the listing active allows the seller to solicit backup offers as a safety net.
Market Leverage: Staying active can keep buyer interest high and provide negotiating power if the initial deal falters.
MLS Rules: Some MLS systems require homes to remain active until certain steps are completed.
Backup Offers: Sellers may want to accept backup offers in case the original buyer backs out.

Implications for Buyers: Can You Still Make an Offer?

If you’re a buyer and see a home marked active under contract, you still have options:

Submit a Backup Offer: Sellers may accept backup offers. If the original deal falls through, your offer could move into first position.
Tour the Property: You may be able to view the home, depending on the seller’s preferences.
Monitor the Status: Your agent can keep you updated on any changes, such as failed inspections or financing issues.
Stay Flexible: While you shouldn’t put all your hopes on one property, being ready with a backup offer can work in your favor.

Important: Even if you submit a higher offer, the seller typically cannot break their current contract to accept it. Backup offers only come into play if the original agreement falls through.

Implications for Sellers: Protecting Your Interests

For sellers, listing a property as active under contract provides several advantages:

Protection Against Failed Deals: If the first buyer can’t meet contingencies, you have backup offers ready.
Maintaining Buyer Interest: Keeping the property visible in the MLS can attract more potential buyers.
Negotiating Power: Multiple interested buyers can give you leverage if the initial deal needs to be renegotiated.

Caution: Sellers must follow the terms of the original purchase agreement. They can’t simply accept a better offer unless the first deal is canceled according to the contract’s terms.

How Long Does a Home Stay “Active Under Contract”?

The active under contract period typically lasts as long as it takes to resolve the contingencies in the purchase agreement. This can range from a few days to several weeks, but most deals close within 30–60 days.

Factors that influence the timeline include:

Complexity of contingencies (e.g., home sale contingency can take longer)
Speed of inspections and appraisals
Buyer’s ability to secure financing
Local market conditions

Once all contingencies are satisfied or waived, the status changes to pending. After closing, it becomes sold.

What Causes a Home Sale to Fall Through?

Even after a property is active under contract, deals can collapse. According to a 2024 Zillow survey, the most common reasons are:

Financing Issues: The buyer can’t secure a mortgage or loses their financing (40% of failed deals).
Inspection Problems: Major issues are discovered, and the buyer backs out or requests repairs the seller won’t make.
Appraisal Shortfall: The home appraises for less than the agreed price, and the buyer or lender won’t proceed.
Title or Legal Problems: Issues with the property’s title or legal status prevent the sale.
Buyer’s Home Sale Falls Through: If the buyer’s purchase is contingent on selling their current home, and that sale fails, the deal may collapse.

Tips for Navigating Active Under Contract Listings

For Buyers

Act Quickly: If you love a home that’s active under contract, submit a strong backup offer right away.
Work with an Experienced Agent: An agent can help you track the status and communicate with the seller’s agent.
Stay Realistic: Backup offers are not guaranteed. Continue searching for other homes while you wait.
Be Prepared: Have your financing, pre-approval, and contingencies in order to strengthen your offer.
→ Get pre-approved

For Sellers

Evaluate Backup Offers Carefully: Choose backup offers that are strong and likely to close if needed.
Communicate Clearly: Work with your agent to manage expectations with both the primary and backup buyers.
Stay on Schedule: Complete inspections, repairs, and disclosures promptly to keep the deal moving.
Understand Your Obligations: You must honor the first contract unless contingencies aren’t met or the buyer cancels.

Frequently Asked Questions

Q: Can a seller accept a higher offer after going active under contract?
A: No. Once a contract is signed, the seller is legally bound to that agreement. Backup offers can only be considered if the original deal falls through.

Q: Can I view a home that’s active under contract?
A: Often, yes—if the seller allows it. Some sellers continue to show the home to attract backup offers.

Q: How do backup offers work?
A: Backup offers are submitted and held in reserve. If the first buyer cancels or fails to meet contingencies, the backup offer can move into first position.

Q: What’s the difference between “active under contract” and “pending”?
A: “Active under contract” means contingencies remain and backup offers are accepted. “Pending” means all contingencies are cleared and the sale is close to closing—no new offers are accepted.

Q: How often do deals fall through at this stage?
A: While most deals close, about 40% of failed transactions are due to financing issues. Other common reasons include inspection and appraisal problems.

Final Thoughts

Active under contract is a crucial phase in the real estate process, signaling that a deal is in progress but not yet finalized. For buyers, it represents a slim but real opportunity to secure a home through a backup offer. For sellers, it provides protection and flexibility in case the initial deal falls through.

Understanding the implications of this status—and how to navigate it—can make the difference between landing your dream home or losing out in a competitive market. Whether you’re buying, selling, or investing, work with an experienced real estate agent and stay informed about the status of your desired property.

At YesLoanz.com, we’re committed to helping you understand every step of the real estate journey. If you have more questions about “active under contract” or need expert guidance, contact us.

Ready to take the next step?

Explore our home buying resources
Get pre-approved
Contact us for expert guidance.

Your dream home could be just one offer away—even if it’s “active under contract.”

This guide is for informational purposes only and does not constitute legal or financial advice. Always consult with a licensed real estate professional for advice tailored to your specific situation.