What is active under contract?

"Active under contract" is a real estate term used to indicate the status of a property that has an accepted offer and a signed contract between the seller and buyer, but the sale is not yet finalized. This status suggests that while the property is still technically active in terms of the real estate market listings, there are contingencies or conditions in the contract that need to be fulfilled before the sale can proceed to closing.

Here are a few key points about the "active under contract" status:

1. Contingencies: The contract may include contingencies such as home inspections, financing approval, or the sale of another property. These conditions need to be met for the contract to move to the next stage.

2. Buyer’s Due Diligence: During this phase, the buyer will typically perform their due diligence, which may involve inspections, appraisals, or other necessary steps to ensure that the property is in satisfactory condition.

3. Potential for Backup Offers: While under this status, sellers often continue to accept backup offers. This means other interested buyers can submit offers that may be considered if the current contract falls through.

4. Timeline for Closing: The time it takes to move from "active under contract" to final closing can vary, depending on the contingencies and how quickly they are resolved.

5. Less Likely to Fall Through: Once a property is in this status, there is a higher likelihood of the sale proceeding compared to when an offer is initially accepted. However, deals do sometimes fall through, allowing backup offers to be considered.

Understanding this status is crucial for both buyers and sellers navigating the real estate process, as it impacts the strategies for negotiations, investing additional effort in the property, and monitoring progress towards closing.