Glossary · The transaction
Under Contract
A property is under contract once the seller accepts a buyer's offer and both sides sign the purchase agreement, but the sale has not yet closed. The deal is legally binding, subject to any remaining contingencies. During this period the parties work through inspections, appraisal, financing, and title, so an under-contract status does not guarantee the sale will complete.
How does under contract work?
After both parties sign, the clock starts on the contract's contingency periods. The buyer schedules inspections, the lender orders the appraisal and underwrites the loan, and title is reviewed. As each condition clears, the deal moves closer to closing and becomes harder to cancel.
Under contract is a stage, not a single moment. It spans everything between acceptance and closing, often 30 to 45 days.
Many steps must still succeed. If financing falls through or an inspection reveals major issues, a contingency may let the buyer cancel and recover the earnest money.
Why does under contract matter?
Under contract tells the market a home is spoken for but not sold. For buyers still searching, it signals the home is likely unavailable yet could return if the deal collapses. For the parties, it defines a binding period with deadlines that carry real consequences.
A meaningful share of under-contract deals fall through, so serious backup buyers sometimes keep watching the listing.
For the buyer and seller, the label marks the start of firm obligations. Missing a deadline or failing to perform can cost the earnest money or the deal itself.
What is the difference between under contract and pending?
Under contract is a broad term for any signed, not-yet-closed deal. In MLS listings it usually appears as contingent when conditions remain, or pending when the major contingencies are satisfied. Pending is closer to closing and less likely to fall through than a contingent listing.
Think of under contract as the umbrella, with contingent and pending marking how far along that contract has progressed.
Because a contingent home still has open conditions, buyers who missed out sometimes submit backup offers in case the primary deal fails. Terminology varies by MLS.
Worked example. For example, a seller accepts a 275,000 dollar offer on Monday and both parties sign. The home is now under contract. Over the next month the buyer completes an inspection, the lender orders an appraisal and finalizes the loan, and title is cleared. The listing shows as contingent, then pending, and finally sold once the deal closes and the deed records.
Common mistakes with Under Contract
- Assuming an under-contract home is fully sold and giving up too early when a backup offer might still succeed.
- As a buyer, treating under contract as final and skipping careful attention to your contingency deadlines.
- As a seller, halting all backup interest before contingencies are removed and the deal is more secure.
- Making major financial moves during the under-contract period that could threaten your loan approval.
- Confusing the general term under contract with the specific MLS statuses of contingent and pending.
Pending vs. Contingent
Two listing statuses that describe how far along an accepted offer is toward closing.
Define TermContingency
A condition in a purchase contract that must be met for the sale to proceed.
Define TermActive, Pending, and Sold Status
The core MLS statuses that describe where a listing stands in the sales process.
Define TermClosing / Settlement
The final step where ownership legally transfers from seller to buyer and funds are disbur
Define