When browsing homes on Zillow, you might come across the term “under contract” on certain listings. For many, this phrase raises questions about the property’s availability and what it means for potential buyers. Understanding this term is key to navigating the home-buying process with confidence.
In real estate, “under contract” signifies a pivotal stage in a property’s sale. It indicates that the seller has accepted an offer, but the deal isn’t finalized yet. This status often leaves buyers wondering whether they still have a chance to make an offer or if the home is off-limits. Knowing the implications of this status can help buyers make informed decisions and avoid unnecessary frustration.
What Does Under Contract Mean On Zillow?
“Under contract” on Zillow indicates a property seller has accepted a buyer’s offer, but the sale hasn’t been finalized yet. This stage usually involves completing inspections, securing financing, and meeting other agreed-upon conditions. The property is temporarily off the market during this time, reducing its availability to new interested buyers.
The sale isn’t guaranteed at this stage since issues like financing problems or inspection concerns can prevent closing. If the deal falls through, the property might become available again. Buyers interested in such properties can monitor their status on Zillow for updates.
Understanding this term helps potential buyers know that the property may not currently be an option but isn’t yet officially sold. Real estate transactions often involve several stages, so tracking a listing’s exact status is key when using Zillow.
How A Property Becomes Under Contract
A property is marked “under contract” when the buyer and seller agree on terms and sign a purchase agreement. This status indicates the sale process is moving forward but not yet completed.
The Role Of Buyer And Seller Agreements
Purchase agreements, signed by both parties, outline the terms of the sale. These include the agreed sale price, contingencies such as inspections or appraisals, and deadlines for completing necessary steps. The buyer’s signature shows their commitment to purchasing the property, while the seller’s signature takes it off the active market for other buyers.
Agreements serve as legally binding documents and ensure both parties adhere to the negotiated terms. If agreed terms are not met, the deal may be terminated, allowing the property to return to the market.
Key Steps In The Contract Process
- Offer Acceptance
After a buyer submits an offer, the seller may accept, reject, or counter it. Once both parties agree on the terms, the contract becomes effective.
- Contingency Period
The inspection and appraisal take place during this time. If significant issues are found, the buyer or seller can renegotiate or back out based on agreed contingencies.
- Loan Approval
Most buyers secure financing from lenders, requiring loan approval. The property must also meet the lender’s conditions to finalize funding.
- Title Search
A title company ensures the property has no liens or legal disputes that could prevent the seller from transferring ownership.
- Closing Preparation
Both parties must finalize paperwork and pay any required fees, typically handled by an escrow or title company, to complete the sale.
These steps convert a verbal agreement into a legally binding contract, formalizing the transition toward the property sale.
Can You Still Make An Offer On A Property Under Contract?
Submitting an offer on a property that’s “under contract” is possible, but the process comes with specific conditions depending on the property and seller’s terms.
Contingencies And Their Impact On Offers
Contingencies, like inspection or financing requirements, can influence the sale’s progress when a property is under contract. If any contingency isn’t fulfilled, the agreement may fall apart. During this time, some sellers accept backup offers as a precaution in case the primary deal doesn’t close. A backup offer allows the buyer to step in only if the active contract is terminated.
When A Deal May Fall Through
Deals fall through when buyers fail to secure financing, inspections uncover significant issues, or appraisal results don’t meet expectations. These scenarios create opportunities for other buyers to enter the process. Monitoring the property’s status on Zillow ensures buyers can act quickly if the listing becomes active again.
Importance Of Knowing The Status Of A Listing
Understanding the status of a property listing ensures buyers and sellers make better decisions throughout the real estate transaction process. Zillow’s listing details, such as “under contract,” provide critical insights into a property’s availability and its next steps.
Differentiating Between “Active” And “Under Contract”
“Active” means a property is available with no accepted offers, making it open to all interested buyers. “Under contract” indicates a seller has accepted an offer, but the property isn’t officially sold. It’s in a temporary phase where conditions like inspections or appraisals are addressed.
On Zillow, listings marked “active” often get more attention, as they appear ready for immediate offers. “Under contract,” however, signals limited availability since the property may return to the market if issues arise during the contract phase. For example, financing denials or inspection problems can lead to listings transitioning back to active status.
How It Helps Buyers And Sellers
Identifying listing statuses helps buyers target suitable properties and prioritize efforts. “Active” listings present immediate opportunity, whereas “under contract” properties require monitoring in case they become reavailable. Both situations enable buyers to strategize, reducing wasted time on unavailable houses.
Sellers can assess the buyer market better by updating their listing’s status. An “under contract” status informs others that the sale is in progress, dissuading uninterested inquiries. Backup offers received during this phase remain advantageous, ensuring sellers have options if initial deals fail.
Tips For Buyers Viewing Under Contract Properties
Properties marked as “under contract” on Zillow are not entirely off the table. Buyers can strategize by staying informed and considering backup options.
Staying In Touch With The Agent
Agents are valuable sources of current information about a property’s status. Buyers can request updates about any potential changes, such as a deal not moving forward due to unfulfilled contingencies. Regular communication with the seller’s agent keeps buyers informed if an opportunity arises to submit an offer.
Exploring Backup Offers
Submitting a backup offer provides buyers with a conditional opportunity to purchase the property. If the initial buyer’s deal falls through, the seller may consider the next offer in line. Buyers interested in backup offers must clearly define terms, such as price and contingency clauses, ensuring their position is legally recognized in case the property becomes available again.
Conclusion
Understanding the “under contract” status on Zillow is crucial for navigating the real estate market effectively. It represents a significant step in the home-buying process but doesn’t guarantee a finalized sale. Buyers and sellers alike benefit from staying informed about this phase, as it impacts decision-making and opportunities. Monitoring a property’s status and considering backup offers can help buyers remain competitive while sellers maintain flexibility.
Frequently Asked Questions
What does “under contract” mean in real estate?
In real estate, “under contract” means the seller has accepted an offer, but the sale isn’t finalized yet. The property is temporarily off the market while conditions such as inspections, financing, and appraisals are completed.
Can I make an offer on a property that’s “under contract”?
Yes, you can submit a backup offer on a property that’s “under contract.” If the initial deal falls through, your backup offer can be considered by the seller.
Does “under contract” mean the property is sold?
No, a property “under contract” isn’t officially sold. The deal could still fall through due to unmet contingencies, financing issues, or inspection concerns.
What are common reasons a deal under contract might fall through?
Deals often fail due to financing problems, unsatisfactory inspection results, or appraisals coming in lower than the agreed sale price.
How long does a property usually stay “under contract”?
The duration varies, typically lasting 30 to 60 days. Timeframes depend on factors such as inspections, financing approvals, and contingencies.
Is it worth tracking “under contract” properties on Zillow?
Yes, tracking “under contract” properties is helpful. If the deal falls through, the property may become available again, giving you a chance to act quickly.
What’s the difference between “active” and “under contract”?
“Active” means the property is available for offers, while “under contract” indicates an offer was accepted, but the sale isn’t closed yet.
Why do sellers accept backup offers on “under contract” properties?
Sellers accept backup offers as a precaution in case the primary deal falls through, ensuring they have another buyer lined up.
Can I withdraw a backup offer if the initial deal doesn’t fail?
Yes, as long as your contract allows, you can withdraw your backup offer anytime before it’s formally accepted by the seller.
How can I stay updated on a property’s status?
Stay in touch with the seller’s agent to get real-time updates or monitor the listing’s status on platforms like Zillow. Communication is key.