If you’ve ever searched for a home online or spoken with a real estate agent, you’ve probably seen the phrase “under contract” next to some property listings. But what does it actually mean when a home is under contract? Understanding this term can help buyers and sellers navigate the home-buying process more confidently.

1. The Basic Meaning

When a property is under contract, it means that the seller has accepted an offer from a buyer, and both parties have signed a purchase agreement. However, the sale is not yet final — there are still steps to complete before the ownership officially changes hands.

Think of it as being “in progress.” The seller has agreed to sell, and the buyer intends to buy, but the deal isn’t closed until all conditions are met.

2. Common Contingencies

Most real estate contracts include contingencies, which are specific conditions that must be fulfilled for the sale to move forward. Common examples include:

• Home inspection contingency: The buyer can back out or renegotiate if major issues are found during the inspection.

• Financing contingency: The sale depends on the buyer securing a mortgage or loan.

• Appraisal contingency: The property must appraise for at least the purchase price.

• Title contingency: Ensures the property’s title is clear of legal disputes or liens.

If these conditions aren’t met within the agreed timeframe, the buyer (or sometimes the seller) can cancel the contract without penalty.

3. Under Contract vs. Pending

People often confuse “under contract” with “pending.” While the exact meaning can vary by region or platform, here’s the general difference:

• Under Contract: The deal is active, but contingencies are still being worked through.

• Pending: All contingencies have been resolved, and the transaction is moving toward closing.

In other words, pending means the sale is further along and more likely to be finalized soon.

4. Can You Still Make an Offer?

Yes — in some cases. When a home is under contract, it’s technically off the market, but many agents will still accept backup offers. If the original deal falls through due to financing issues or failed contingencies, a backup buyer might step in immediately without the home returning to the open market.

5. What Happens Next?

Once all contingencies are cleared, and both parties complete their contractual obligations — such as signing final documents, transferring funds, and recording the deed — the property officially becomes “sold.” At that point, the listing changes from under contract or pending to closed.

In Summary

The phrase “under contract” marks an important stage in the real estate process — a middle ground between “for sale” and “sold.” It means an agreement has been made but not yet finalized. For buyers, it’s a sign that the property is spoken for (but not impossible to get). For sellers, it’s a milestone showing progress toward closing the deal.