What Does Active under Contract Mean?

What is the meaning of active under contract?

Real estate listings that have an “Active Under Contract” status imply that the seller has accepted a purchase offer, but the transaction has not yet closed. This could be a single-family home, condo, townhome, or any type of real estate. This word is mostly used in California.

When a property is listed on a Multiple Listing Service (MLS), its status is set to “Active.” Once an offer is accepted, it is upgraded to “Active Under Contract” until the deal closes or is canceled. The status turns to “Sold” after closing.

Active

After agreeing to market a property for a client, real estate agents and brokers will draft a detailed description of the property and submit it to a multiple listing service (MLS) in their area. When that happens, other real estate agents will be able to see the property in their Multiple Listing Service (MLS) accounts and consider it officially listed for sale. The current status is Active.

The new listing is shared with websites owned by agents and brokers within minutes. These websites receive a direct data stream from the MLS. This feed and the official property listings it contains are only accessible to brokers and agents who pay dues to an official MLS.

Zillow and Trulia, two of the most popular real estate websites, did not always quickly get listings. There were fewer listings and less up-to-date status information on these huge websites only a short time ago. Homebuyers frequently discovered that a house they were interested in seeing on a portal was really under contract with another buyer when they contacted the realtor to schedule a viewing.

Active Under Contract

The listing status switches to Active Under Contract when the seller accepts a contractual offer from a buyer.

After receiving a signed offer, the seller is legally unable to enter into any other contracts involving the same property with anyone else, and the buyer is legally obligated to pay for the home. As a result, the property is effectively removed from the market. But, the deal won’t close unless the conditions specified in the contract—which are present in almost all real estate contracts—are satisfied. In certain cases, unanticipated circumstances might cause a sale to fall through. So, the house is still up for grabs online.

The buyer’s capacity to secure sufficient financing is the most typical contingency, while other typical ones include the conclusion of a house inspection, an appraisal, a title search, or a review by an attorney.

The closing stage, also known as the contingency period, of a real estate transaction typically lasts around 30 days, depending on the market conditions, but can range from a few days to a few weeks. Because lenders and appraisers are struggling to keep up with demand and deal volume, the closing stage can drag on in real estate areas that are seeing strong price appreciation.

No other party may enter into a contract with the seller to purchase the same property while the listing status is Active Under Contract, as previously stated. On the other hand, sellers have the option to gather more offers from interested parties. In essence, backup offers act as stand-ins for the subsequent buyer or buyers.

If the first offeror fails to carry out their obligations under the contract, the sale will fall through, and the seller can move swiftly to the next offer. When supply is low and demand is high in a real estate market, backup offers are commonplace.

Pending

When all conditions are satisfied and the house enters the escrow period, where the last paperwork, signatures, and funding take place, the status changes to pending listing.

Active Under Contract periods can be many days or weeks long, in contrast to pending periods. Usually, a Pending status won’t be there for more than a day or two. Additionally, pending deals close at an extremely high rate, making their availability highly unlikely.

In the extremely uncommon event that a Pending property does not close, you may expect to see it returned to the Multiple Listing Service (and our site) in no time. Subscribing to email notifications/listing alerts is a great way to keep up with the latest Los Angeles real estate listings.

Sold

These items are no longer available for purchase. People who would like to sell their property usually search for sold listings to get a feel for the market value of similar homes that have recently sold.

After the initial offer, why not simply take it off the MLS?

Since contracts don’t always go through, it’s in the seller’s best interest to keep advertising the house, condo, etc. Keeping it visible to as many potential purchasers as possible is the prudent thing to do. It is wise to seek out alternative purchasers in case the present agreement falls through.

Are properties that are classified as Active Under Contract still available for me to view in person?

Yes and no. Tours may not be possible while a house is “Active Under Contract” with some sellers. They could be getting ready to move and would prefer if you didn’t bother them. After all, moving a house full of possessions while keeping it spotless for showings is no easy feat.

You should also know that seeing houses that are under contract isn’t the best use of your time because the majority of properties that get to this point will close. Sellers will be more accommodating to showing the property to other potential buyers if they have doubts about the likelihood of closing their existing deal.

How many months may a house be under contract?

Depending on the market, the closing phase of a home purchase might take anywhere from thirty to forty-five days (and sometimes even sixty days) during high seasons. Financing and the elimination of contingencies through appraisal, inspection, etc., are time-consuming processes.

Am I able to put an offer on a home even if it’s already under contract?

Of course! Feel free to put up a bid. Nevertheless, your offer will not be accepted by the seller unless there is a violation of their current contract.