When browsing homes on Zillow, you’ve likely come across the term “under contract.” For many, it sparks curiosity and even confusion—does it mean the house is sold, or is it still available? Understanding this term is crucial, especially for buyers and sellers navigating the real estate market.
In real estate, “under contract” signifies an important step in the home-buying process. It indicates that a buyer and seller have agreed on terms, but the sale isn’t final yet. Knowing what this status entails can help you make informed decisions, whether you’re actively searching for a home or simply exploring your options.
Understanding “Under Contract” On Zillow
“Under contract” on Zillow means the seller has accepted an offer from a buyer, and the home is temporarily off the market. However, the transaction isn’t complete until all conditions, like the home inspection and financing, are resolved.
This status indicates the property is in the closing process but might still accept backup offers if the primary deal falls through. Buyers viewing such properties can reach out to their agent for clarification, as the listing isn’t considered sold until closing is finalized. Sellers monitor the process closely while ensuring all agreed-upon terms are met to avoid delays. House listings marked with this status may return to active if conditions aren’t satisfied.
The Home Buying Process And Its Stages
The home buying process involves multiple stages that help buyers and sellers complete a real estate transaction. Each phase requires specific actions to move toward closing the sale.
What Does “Under Contract” Indicate?
“Under contract” means a seller has accepted a buyer’s offer, and the property is temporarily unavailable to other buyers. The sale is not yet final, as specific conditions, such as inspections, appraisals, and financing, must be completed. This stage shows progress in the transaction but still leaves room for changes if terms aren’t met or contingencies fail.
Difference Between “Under Contract” And “Pending”
“Under contract” refers to a property where a signed agreement exists but unresolved contingencies remain. For example, sellers might wait for mortgage approval or inspection results.
“Pending” indicates all contingencies have been fulfilled, and the transaction is nearly complete. These properties are closer to closing, with minimal risk of the deal falling through. On Zillow, this distinction helps buyers understand how far along a property is in the process.
Can You Still Make An Offer On A Property?
When a property is marked “under contract” on Zillow, it’s not yet sold. Buyers may still have opportunities to submit backup offers.
Factors To Consider Before Making An Offer
Check the contract status with your agent. Some contracts allow sellers to accept backup offers, while others do not. Understanding the terms helps avoid unnecessary steps.
Evaluate the likelihood of the original deal failing. Common reasons include financing issues, failed inspections, or unmet contingencies. If these seem probable, submitting a backup offer could be worthwhile.
Ensure your offer is competitive. Sellers are less likely to entertain backup offers if they are significantly lower than the agreed price.
How Likely Is A Deal To Fall Through?
Real estate contracts fail occasionally. According to the National Association of Realtors, about 5% of contracts terminate before closing.
Financing problems are a leading cause. Buyers may be unable to secure loans, leaving sellers seeking new offers. Inspection issues, revealing costly defects, can also derail deals.
Backup offers hold potential if the original contract faces obstacles. Sellers often favor prepared buyers for backup agreements.
What Happens When A Home Is Under Contract?
When a home is under contract, a binding agreement exists between the buyer and seller, indicating that the seller has accepted an offer, but the transaction isn’t yet final. The process progresses through specific steps to meet all contractual conditions before closing.
The Role Of Contingencies
Contingencies are specific conditions included in the contract that must be met for the sale to proceed. Common contingencies involve home inspections, financing approval, and appraisals. For instance, a home inspection contingency allows the buyer to evaluate the property for major issues. Financing contingencies protect the buyer if they’re unable to secure a mortgage. If any contingency isn’t satisfied, either party may renegotiate or cancel the agreement based on the terms.
Timeline And Next Steps
The timeline typically spans 30-60 days from the date the contract is signed to closing. During this period, tasks like securing financing, completing inspections, and meeting appraisal requirements occur. Once all contingencies are resolved, the status changes to “pending,” and the closing process begins. In rare cases where contingencies fall through, the agreement might end, and the home could return to the market.
Tips For Buyers Navigating Zillow Listings
Buyers checking Zillow should be well-prepared to make decisions on homes under contract or available. Understanding market activities and staying informed helps avoid costly mistakes.
How To Spot Opportunities In The Market
Buyers looking for homes under contract can watch for contingencies that may affect the deal. Failed inspections, financing troubles, or buyer withdrawals provide openings. Reviewing homes labeled “under contract” but accepting backup offers allows buyers to prepare competitive bids. Engaging a real estate agent ensures buyers stay updated on changes regarding such properties.
Monitoring neighborhood pricing trends helps buyers identify deals. Comparing similar homes with varying contract statuses gives insights into typical values. Focus on homes within budget ranges to allocate time efficiently. Properties lingering in “under contract” status for too long may signal potential availability.
Staying Informed During The Process
Buyers should check Zillow listings regularly for status changes. “Under contract” homes marked as “pending” indicate progress, narrowing chances for new offers. Collaborating with an agent ensures buyers are informed of potential re-listings caused by contracts failing.
Setting up Zillow notifications for preferred areas streamlines updates. Verified agents often have access to additional tools that track moving statuses. These resources help buyers act swiftly if a home returns to the market or an opportunity arises.
Conclusion
Understanding the “under contract” status on Zillow is essential for navigating the real estate market effectively. It helps buyers and sellers make informed decisions while clarifying where a property stands in the transaction process. Staying proactive, monitoring listings, and working closely with a knowledgeable real estate agent can give buyers an edge, especially when backup offers are an option. By keeping an eye on contingencies and market trends, buyers can position themselves for success, whether pursuing an under-contract home or waiting for new opportunities to arise.
Frequently Asked Questions
What does “under contract” mean in real estate?
“Under contract” in real estate means the buyer and seller have agreed on the terms of a sale, but the transaction hasn’t been finalized. The property is temporarily off the market while contingencies like inspections and financing are resolved.
Can a buyer make an offer on a home that is under contract?
Yes, buyers can submit a backup offer if the seller allows it. This ensures the buyer is next in line if the current deal falls through due to issues like financing or failed inspections.
How is “under contract” different from “pending”?
“Under contract” means there are unresolved contingencies, such as inspections or financing approval. “Pending” indicates all contingencies have been satisfied and the transaction is nearing closing.
What contingencies must be met while a home is under contract?
Common contingencies include passing home inspections, securing financing, appraising the property, and resolving any contractual requirements. If these aren’t met, the deal might fall through.
How long does a home stay under contract before closing?
The timeline for a home under contract typically ranges from 30 to 60 days. This period allows the buyer and seller to fulfill all contractual obligations before closing the sale.
Why do some homes under contract return to the market?
Homes may return to the market if the deal falls through due to financing issues, failed inspections, or other unresolved contingencies. This creates opportunities for new buyers to make offers.
Should buyers consider backup offers for under-contract homes?
Yes, submitting a well-prepared backup offer can be advantageous. If the primary deal fails, the seller may accept the backup offer without re-listing the property, speeding up the process.
How can buyers stay updated on under-contract homes on Zillow?
Buyers can set up Zillow notifications for status updates and work with a real estate agent. Regularly checking listings and monitoring homes in preferred neighborhoods helps buyers act quickly.
What percentage of real estate contracts fail before closing?
Approximately 5% of real estate deals fail before closing, often due to issues like financing problems or substantial defects discovered during inspections.
What should buyers consider before making an offer on an under-contract home?
Buyers should check the contract status with an agent, evaluate the likelihood of the original deal failing, and ensure their backup offer is competitive and attractive to the seller.
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