What Does “Under Contract” Mean in Real Estate?

If you’ve ever browsed home listings, chances are you’ve seen a property marked under contract and wondered what that actually means. Is it sold? Is it still available? Can you make an offer anyway? At The Alpha Realty Team, we get these questions all the time from both buyers and sellers, and the answer is simpler than it sounds, but there are a few important details worth understanding.

Let’s break it down in plain language so you know exactly what’s happening behind the scenes when a home goes under contract.

The Simple Definition

When a home is under contract, it means a buyer and seller have agreed on the terms of the sale and signed a purchase agreement. In other words, they’ve officially committed to moving forward with the transaction, but the sale hasn’t closed yet.

Think of it like being engaged rather than married. The decision has been made, but there are still steps to complete before it’s final.

What Happens After a Home Goes Under Contract?

Once a contract is signed, the transaction enters what’s called the escrow or contingency period. During this time, several important things happen:

• The buyer schedules a home inspection
• The lender finalizes financing
• The appraisal is completed
• Title searches are performed
• Negotiations or repairs may occur

At The Alpha Realty Team, led by Mahdi Salarfar, we always explain to clients that this phase is where the real work begins. Even though an offer has been accepted, there are still conditions that must be satisfied before the deal becomes official.

Why Homes Fall Out of Contract

A common misconception is that “under contract” means the home is basically sold. In reality, some deals don’t make it to the closing table. There are a few reasons why a contract might fall through:

Inspection issues: If the home inspection reveals major problems, buyers may renegotiate or walk away.

Financing problems: If the buyer’s loan is denied or delayed, the deal could collapse.

Appraisal gaps: If the home appraises for less than the agreed price, negotiations may restart.

Contingencies not met: Many contracts include conditions that must be satisfied within a certain timeframe.

Because of these possibilities, some under-contract homes may return to the market. That’s why buyers should never assume a listing is completely off-limits.

Can You Still Make an Offer on an Under-Contract Home?

Sometimes, yes.

In certain cases, sellers may accept backup offers. A backup offer puts you next in line if the first contract falls through. While it doesn’t guarantee you’ll get the home, it positions you ahead of other buyers if the original deal doesn’t work out.

We often recommend this strategy to clients who fall in love with a property that’s already under contract. In competitive markets, especially, having a backup offer ready can be a smart move.

What “Under Contract” Means for Sellers

From a seller’s perspective, going under contract is exciting. It means your home attracted a serious buyer and negotiations were successful. However, it’s not time to celebrate just yet.

Until closing day, the transaction is still in progress. Sellers must:

• Complete agreed-upon repairs
• Provide the necessary documents
• Stay flexible for inspections and appraisals
• Maintain the property’s condition

Our team always advises sellers to treat this stage as a partnership. The smoother you cooperate with the buyer’s requests (within reason), the more likely the deal will close successfully.

Under Contract vs. Pending: Is There a Difference?

You may also see listings labeled pending, which can be confusing. While terminology varies slightly by market and listing system, here’s a general guideline:

• Under Contract: The agreement is signed, but contingencies are still being completed.
• Pending: Most contingencies have been satisfied, and the deal is close to closing.

Not all regions distinguish between these terms, but when they do, “pending” usually signals a later stage in the process.

Why Understanding This Status Matters

Whether you’re buying or selling, knowing what “under contract” really means helps you make smarter decisions.

For buyers:

You’ll know not to give up too quickly on a home you love. You can ask your agent about backup offers or similar listings.

For sellers:

You’ll understand that your job isn’t done once a contract is signed. Staying responsive and organized can prevent delays or cancellations.

For both:

It sets realistic expectations about timelines and the steps required before closing day.

How We Guide Clients Through the Contract Stage

At The Alpha Realty Team, we see the contract period as one of the most important phases of the entire transaction. This is where details matter most, deadlines are critical, and communication can make or break a deal.

We walk our clients through every step, including:

• Reviewing contingency deadlines
• Coordinating with lenders and title companies
• Negotiating repairs or credits
• Ensuring paperwork is completed correctly

Our goal is to remove stress and keep everything on track so you can move confidently toward closing.

Final Thoughts

So, what does under contract really mean in real estate? It means a buyer and seller have agreed to work together toward a sale, but the finish line hasn’t been crossed yet. It’s a promising stage, not a guaranteed outcome.

Understanding this status gives you an edge whether you’re house hunting or selling your property. And if you ever feel unsure about what a listing status means or what your next move should be, having an experienced team on your side makes all the difference.

From our perspective at The Alpha Realty Team, the contract phase is where expertise truly shines. Anyone can help you find a home or list one, but guiding you smoothly from contract to closing is what turns a good real estate experience into a great one.