Active Under Contract Status: What It Means in Real Estate Transactions

By David KimLast Updated April 18, 2025

Understand the’ active under contract’ status in real estate

When browse real estate listings, you might come across properties label as’ active under contract’ (AUC) or sometimes’ active contingent.’ this status oftentimes create confusion for both potential buyers and sellers. Is the property stock still available? Should you bother schedule a showing? Let’s clarify what this important designation really mean in the real estate market.

What does’ active under contract’ mean?

Active under contract is a list status that indicate a seller has accepted an offer from a buyer, but the deal hasn’t close withal. The property remain technically active on the multiple listing servic((MLS)) while the buyer work through contingencies outline in the purchase agreement.

This status represent a middle ground between’ active’ (entirely available )and’ pepence( (der contract with contingencies satisfy ).)t signsignalst while the seller has comcommitted a buyer, certain conditions must stillness be meet before the sale can proceed to closing.

Key characteristics of active under contract properties

The seller has accepted an offer
The property remain visible on list platforms
Contingencies are notwithstanding in place
The seller may consider backup offers
The property is not entirely off the market

Active under contract vs. Pence status

The distinction between active under contract and pending status is important for understanding where a property stand in the sales process:

Active under contract:

Contingencies are notwithstanding being address
The seller typically continues to show the property
Backup offers may be accepted
The deal have a higher chance of fall through

Pence status:

Most or all contingencies have been satisfied
The property is typically nobelium foresighted being show
The transaction is move toward closing
The deal is less likely to fall through

Some regions use different terminology. In certain markets,’ active contingent’ might be use alternatively of’ active under contract,’ while others might use’ pending’ for both situations with different qualifiers.

Common contingencies in real estate contracts

Understand the contingencies that keep a property in AUC status help explain why these properties remain moderately available. Hither are the nigh common contingencies:

Home inspection contingency

This allows buyers to have the property professionally inspect and potentially negotiate repairs or price adjustments base on the findings. If significant issues arediscoveredr and the seller refuse to address them, the buyer may walk out with their earnest money intact.

Finance contingency

This protects buyers who need to secure a mortgage loan. If theycan’tt obtain financing under the specified terms, they can exit the contract without penalty. The financing process typically includes:

Loan application submission
Credit verification
Income and employment verification
Property appraisal
Final loan approval

Appraisal contingency

This contingency ensure the property appraise for at least the purchase price. If it appraises low, the buyer can request a price reduction, contribute additional funds to cover the gap, or cancel the contract.

Home sale contingency

This allows buyers to make their purchase contingent on sell their current home. This is oftentimes the longest contingency and may keep a property inAUCc status for an extended period.

Title contingency

This give buyers the right to review the property’s title report and cancel the contract if serious issues like liens or disputes are discovered.

Why sellers choose the active under contract status

Sellers opt for the AUC status for several strategic reasons:

Maintain market visibility

Keep the property active in listings mean it continue to attract attention from potential buyers who might submit backup offers if the current deal fall done.

Leverage with current buyers

When buyers know others are ease view the property and potentially make offers, they may be more motivated to fulfill contingencies promptly and less likely to request extensive concessions.

Insurance against failed deals

With approximately 4 7 % of real estate contracts fall through before closing, maintain visibility provide sellers with a safety net of backup buyers.

Maximizing sale potential

If an importantly better offer come in while inAUCc status, some sellers may have provisions allow them to accept it if the current buyercan’tt match the terms.

What active under contract means for buyers

If you’re interested in a property list as active under contract, here’s what you should know:

For primary buyers (those under contract )

As the buyer whose offer has been except:

Work diligently to satisfy contingencies within the specified timeframes
Maintain clear communication with your agent and lender
Be prepared for the seller to continue show the property
Understand that the seller may be entertained backup offers
Keep your financing in order and be responsive to requests for documentation

For prospective buyers (interested in an aAUCproperty )

If you’re considered aAUCuc property:

You can notwithstanding view the property in most cases
Submit a backup offer if you’re badly interested
Understand your position as a backup buyer
Be prepared to move rapidly if the current deal fall through
Don’t pin all your hopes on an AUC property; continue your search

Make a backup offer

A backup offer put you future in line if the current contract fall done. To make an effective backup offer:

Make it compelling, potentially higher than the current offer
Include fewer contingencies if possible
Demonstrate strong financing pre-approval
Offer flexible closing terms
Consider write a personal letter (where lawfully permit )

What active under contract means for sellers

If you’re a seller with a property in AUC status:

Maintain the property

Continue keep the property in show condition. The current deal might fall done, and you will want to be ready for new showings without delay.

Consider backup offers

Evaluate backup offer cautiously. A stronger backup offer might give you leverage with your current buyer or provide a safety net if the current deal collapse.

Manage contingency timelines

Track contingency deadlines tight. If buyers miss deadlines, you may have grounds to cancel the contract and move to a backup offer.

Communication strategy

Maintain clear communication with your agent about show requests and backup offers. Will establish how these will be will handle to will avoid confusion.

Regional variations in terminology

Real estate terminology vary by location. Here’s how different regions might refer to the AUC status:

Common alternative terms

Active contingent:

Use in many MLS systems, specially in western states
Contingent:

A simplified version use in some regions
Under contract:

Common in eastern states
Active with contract:

Use in some southern markets
Sale pending:

Sometimes use interchangeably, though technically different

Ever ask your real estate agent to clarify the exact meaning of a property’s status in your local market, as interpretations can vary.

How yearn does active under contract status last?

The duration of the AUC status vary base on the contingencies involve:

Inspection contingencies:

Typically, 7 14 days
Finance contingencies:

Normally 30 45 days
Appraisal contingencies:

Roughly 2 3 weeks
Home sale contingencies:

Can extend for months

On average, properties remain in AUC status for 30 60 days, though this timeline can vary importantly base on market conditions, the complexity of the transaction, and the specific contingencies in place.

Statistics on failed contracts

Understand the frequency of fail contracts help explain why the AUC status exist:

Roughly 4 7 % of real estate contracts fall through before closing
Financing issues account for approximately 31 % of fail deals
Inspection problems cause most 25 % of cancellations
Appraisal issues lead to some 16 % of fail contracts
Buyer’s remorse or change circumstances account for almost 11 % of cancellations

These statistics highlight why sellers frequently prefer to keep their options open by maintain the AUC status quite than move straightaway to pending.

Legal aspects of active under contract status

The AUC status have several legal implications worth understanding:

Contract obligations

Despite the property remain visible on the market, sellers have lawfully bind obligations to the current buyer. They can not but accept another offer unless specific contract provisions allow it or the current buyer fail to meet contingency requirements.

Earnest money considerations

Earnest money â€” the deposit buyers provide with their offer â€” is hold in escrow during the AUC period. If contingencies are not satisfied, the buyer typically receives this moneyendorsese. If the buyer back out for reasons not cover by contingencies, the seller mabe entitledle to keep the earnest money.

Disclosure requirements

Sellers must disclose that they’ve accepted an offer when show to potential backup buyers. Failure to disclose this information could potentially lead to legal issues.

Strategies for different market conditions

The significance and handling of AUC properties vary base on market conditions:

In seller’s markets

When inventory is low and demand is high:

Sellers have more leverage with contingent buyers
Backup offers are more common and oftentimes supra ask price
Buyers may waive contingencies to strengthen their offers
AUC properties may move to pence status more promptly

In buyer’s markets

When inventory is high and demand is lower:

Sellers may be more accommodate with contingencies
Backup offers are less common
Properties may remain in AUC status yearn
Buyers have more negotiating power throughout the process

Conclusion: navigate active under contract properties

The active under contract status represent a critical transition phase in real estate transactions. For sellers, it provides a safety net while move toward closing. For primary buyers, it’s a period to diligently complete contingencies. For prospective buyers, itrepresentst an opportunity to position themselves as the next in line should the current deal fall done.

Understand this status help all parties navigate the complex real estate process more efficaciously. Whether you’re bought or sell, work with an experienced real estate agent who understand the nuances of your local market’s terminology and practices is essential for successfully navigate properties in the active under contract phase.