Understanding 'Active Under Contract' in Real Estate: What Buyers and Sellers Need to Know

By David KimLast Updated April 18, 2025

Introduction: Decoding ‘Active Under Contract’

In the dynamic world of real estate, property statuses play a critical role in guiding the actions of buyers, sellers, and agents. Among these, ‘active under contract’ is a term that often generates confusion and curiosity. Understanding this status is essential for anyone navigating home purchases or sales, as it can directly impact your options, negotiation strategies, and the likelihood of a transaction’s success. This article provides a detailed, actionable overview of what ‘active under contract’ means, how it differs from other listing statuses, and what steps buyers and sellers should take during this crucial period.

What Does ‘Active Under Contract’ Mean?

When a property is marked as active under contract , it indicates that the seller has accepted an offer from a buyer, but the sale is not yet final. This status signals that the transaction is still subject to one or more
contingencies
-conditions that must be satisfied before the sale can close. Common contingencies include home inspections, appraisals, loan approvals, or the successful sale of the buyer’s current home [1] , [5] .

Unlike a ‘pending’ status, where all contingencies have usually been cleared, ‘active under contract’ keeps the door open for backup offers. The property remains visible in the Multiple Listing Service (MLS), signaling to other prospective buyers that while the home is ‘spoken for,’ the deal isn’t done yet [4] .

How ‘Active Under Contract’ Differs from ‘Pending’

Understanding the difference between ‘active under contract’ and ‘pending’ is crucial for setting expectations:

Active Under Contract: Offer accepted, but contingencies remain. Backup offers are typically allowed.
Pending: All contingencies are resolved or waived, and the transaction is moving toward closing. New offers are generally not considered.

This distinction matters because the likelihood of a deal falling through is higher during the ‘active under contract’ phase than once a property is pending [1] , [3] .

The Role of Contingencies in Real Estate Transactions

Contingencies are legally binding conditions written into the purchase agreement to protect both the buyer and the seller. Here are some common types:

Home Inspection Contingency: Allows buyers to back out if the inspection reveals significant issues.
Appraisal Contingency: Ensures the property appraises at or above the purchase price for the buyer’s lender.
Financing Contingency: Gives buyers time to secure mortgage approval.
Sale Contingency: Makes the purchase dependent on the buyer selling their current home.

These contingencies must be resolved within a specified timeframe, often 30-60 days, for the sale to progress. If they are not met, the contract can be terminated, and the property may become available again [4] , [2] .

What ‘Active Under Contract’ Means for Buyers

If you are a buyer eyeing a home listed as active under contract, you might still have an opportunity, though the odds are lower. Here’s what you need to know:

1. Submitting a Backup Offer: Most MLS systems allow backup offers on properties with this status. A backup offer is a formal contract that takes effect only if the initial buyer’s deal falls through. This can give you an edge in competitive markets or if you’re particularly interested in a specific property [5] , [4] .

2. Managing Expectations: While backup offers are accepted, sellers cannot simply break their agreement with the first buyer for a better or higher offer. Only if contingencies are not satisfied and the contract is canceled will your backup offer be considered [3] .

3. Next Steps: If you wish to proceed, contact your real estate agent. They can help you draft a backup offer that meets legal requirements and positions you favorably should the initial deal fail.

Alternative Approaches: If time is of the essence, continue searching for other properties while your backup offer is in place. Remember, there is no guarantee the first deal will fall through.

What ‘Active Under Contract’ Means for Sellers

For sellers, this status serves as a buffer while navigating the uncertainty of contingencies. Here’s what to consider:

1. Accepting Backup Offers: Sellers may continue to show the property and accept backup offers. This can provide peace of mind in case the original contract falls through [4] .

2. Legal and Ethical Obligations: Sellers must respect the terms of their initial agreement. Contracts cannot be terminated simply for a better offer; only unmet contingencies or specific contractual clauses allow cancellation [5] .

3. Communicating with Your Agent: Work closely with a licensed real estate professional to ensure compliance with local regulations and MLS rules. Your agent can help manage backup offers and set realistic expectations for all parties involved.

Potential Challenges: If a deal collapses, it can delay your timeline or force you to renegotiate terms. Being proactive in vetting buyers and managing contingencies can mitigate these risks.

Step-by-Step Guidance for Buyers and Sellers

For Buyers:

Identify properties marked as ‘active under contract’ through your agent or MLS platform.
Discuss the potential of submitting a backup offer with your agent. Ensure you understand the legal implications and timelines involved.
Prepare your offer, including all standard disclosures and contingencies. Your agent will present this to the seller’s representative.
Monitor the status of the property. If the primary contract falls through, act quickly to move forward.

For Sellers:

Review all offers carefully with your agent before accepting any, as you will be contractually bound by the terms.
Continue to market and show your property if allowed by your local MLS and as agreed in your listing contract.
Evaluate backup offers for strength and reliability, but do not make commitments that violate your primary agreement.
Stay in close communication with your initial buyer to address contingencies promptly and reduce the risk of contract failure.

How Long Does ‘Active Under Contract’ Last?

The ‘active under contract’ status typically lasts as long as it takes to resolve the contingencies outlined in the purchase agreement. This period generally ranges from 30 to 60 days but can vary based on local market practices, the nature of the contingencies, and the responsiveness of both parties [4] . If all contingencies are met, the property status will shift to ‘pending.’ If not, the contract may be canceled, and the home could return to ‘active’ status on the market.

Real-World Example

Consider a buyer who makes an offer on a home contingent on their ability to sell their current property. The seller accepts, and the listing is marked ‘active under contract.’ During this time, another interested buyer may submit a backup offer. If the first buyer fails to sell their home within the agreed timeframe, their contract can be canceled, and the backup offer may come into play. This process helps sellers minimize downtime and provides motivated buyers with a chance to secure their desired home, even if initially unavailable [2] .

Potential Challenges and Solutions

1. Delays in Contingency Resolution: Inspection, appraisal, or loan approval delays can extend the ‘active under contract’ period. Proactive communication with agents, lenders, and inspectors can help expedite the process.

2. Buyer’s Remorse or Financing Issues: If the initial buyer backs out, sellers may face uncertainty. Having backup offers in place can provide a smoother transition back to an active sale.

3. Legal Compliance: Both parties should ensure all actions comply with their contract terms and local real estate laws. Working with experienced professionals is the best way to avoid costly mistakes.

How to Find and Track ‘Active Under Contract’ Listings

You can search for properties with this status using major MLS platforms and reputable real estate websites. For verified information and the latest status updates, consult your licensed real estate agent or use platforms like Zillow or Realtor.com, which clearly display listing statuses and provide contact information for listing agents [4] .

Key Takeaways for Buyers and Sellers

‘Active under contract’ means a property has an accepted offer with unresolved contingencies.
Buyers can typically submit backup offers, but these will only be considered if the initial contract fails.
Sellers must honor their primary agreement but can accept backup offers as insurance against failed contingencies.
Clear communication and understanding of contract terms are vital for all parties.

For the most up-to-date advice and to navigate the complexities of real estate transactions, consider working with a licensed real estate professional. You can search for local agents through established brokerages or visit widely recognized platforms like Zillow or Realtor.com for agent directories and property status updates.