Active under contract is a term used in the real estate business which indicates the status of real property, for example, a single-family home, condo, town home, etc. that has been put up for sale where a seller accepts the offer from the buyer but the deal has not closed yet. This is a term primarily used in California. A property status is called Active" when it is posted to a Multiple Listing Service (MLS) and then later upgraded to Active Under Contract the moment an offer is accepted until the deal is closed or cancelled. And only after the closing of the agreement is the status changed to "Sold."
There are mainly three types of listing statuses: Active, Pending, and Under Contract
When a real estate broker or agent takes the listing, like signing a contract with the seller to the market and their property, they write up a property description and post it to the regional or local MLS. That moment the property officially becomes up-for-sale, it becomes available to other agents to view by logging in to the MLS. At this point, the status is Active.
In the case of Active Under Contract, when a buyer makes a contractual offer, the seller accepts it. Then the listing status changes to Active Under Contract. So, while the listing status remains Active Under Contract, the seller cannot enter another contract for the same property with another party.
In a time of Pending, a listing status will indicate that all the contingencies will be met and that the home will be in the escrow period where the paperwork, disbursement of funds, and signatures take place.
Earlier, we have briefly discussed about the Active Under Contract. But you should also remember that contingencies in the real estate must be fulfilled before the sale gets finalized. And if the contingencies are not made, there is a chance of failure of the deals. And leaving the door open for other interested buyers.
Contingencies in real estate are typically house inspections, home appraisals, and the buyer overall ability to pay for the home. These contingencies will often add extra time before the process gets closed and thus allowing the parties to see them through.
If you are interested in any active house under contract, you can make it as a backup offer. The contingency period prevents the sellers from entering into another contract with a different buyer. However, the seller can collect the backup offers from other parties interested, which serve as the placeholder for other interested buyers in line.
