As a homebuyer, you may have come across the term „active under contract” while browsing through real estate listings. This phrase can be a bit confusing and may leave you wondering what it means. In this article, we will explain what active under contract means and how it affects your homebuying process.

Active Under Contract Explained

Active under contract is a real estate term that indicates that a seller has accepted an offer from a potential buyer, but the sale has not yet been finalized. This means that the property is still technically active and available for sale, but the seller has agreed to work with the buyer to complete the necessary steps to close the deal.

In most cases, the buyer will have a specific amount of time, usually a few weeks, to complete inspections, secure financing, and finalize any other necessary paperwork. During this time, the listing will remain active under contract, but the seller will not accept any additional offers unless the current deal falls through.

Why Use Active Under Contract?

Using active under contract can be beneficial for both the seller and buyer. For the seller, it allows them to keep their property on the market and continue to receive offers while still working towards a sale with a particular buyer. This can help prevent them from losing potential buyers while waiting for the sale to finalize.

For the buyer, active under contract listings can be an opportunity to make an offer on a property that they may have otherwise missed out on. If the sale falls through, the property will become available again, and the buyer`s offer may be considered.

Impact on Homebuyers

As a homebuyer, understanding what active under contract means can help you manage your expectations during the homebuying process. If you find a property that you love that is listed as active under contract, you can still make an offer and potentially become the backup buyer.

However, it is essential to understand that the current buyer has the first right of refusal, and if they complete the sale, your offer will not be accepted. If you are the backup buyer and the sale falls through, you may still have a chance to purchase the property.

In addition, active under contract listings may have specific deadlines for inspections and other agreements. Therefore, it is essential to work closely with your real estate agent to understand these deadlines and ensure that you complete all necessary steps within the given timeframe.

Conclusion

Active Under Contract is a real estate term that indicates that a seller has accepted an offer from a potential buyer, but the sale has not yet been finalized. It is essential to understand what active under contract means when browsing through real estate listings and negotiating the homebuying process. As a homebuyer, it is crucial to work with a knowledgeable real estate agent who can guide you through the process and help you navigate any challenges that arise.