• Active under contract is a real estate listing status used for properties in which the buyer and seller have a signed purchase contract, but there are certain conditions to be met before the deal can proceed to closing. 
  • Once all conditions (also called contingencies) have been met, the status can progress from active under contract to pending.
  • Home sellers can accept backup offers on active-under-contract listings, but they cannot attempt to execute the backup offer unless the primary purchase contract is justly terminated. 

Whether buying a home or selling one, your real estate transaction will progress through multiple stages as you get the home under contract and work toward closing the deal. Active under contract is one of the stages you’re likely to encounter, but there is a lot of confusion about what this term means and how it differs from other stages in the buying and selling process.

This article will take the mystery out of active under contract and explain what it means for you as a homebuyer or seller. 

What Does Active Under Contract Mean in Real Estate?

Active under contract means that a buyer and seller have signed a contract (a real estate purchase agreement, to be specific), agreeing to the terms of the property sale, but that certain stipulations must be met before the deal can proceed to closing.   

The stipulations that must be satisfied are called contingencies. This is why you may hear people refer to active-under-contract listings as contingent. There may be several contingencies to be met before the deal can move past the active under contract status. If a contingency can not be met, the deal may fall through, and the seller may need to find a new buyer.  

Common Types of Contingencies that Affect Active Under Contract Status

A purchase agreement may include any (or all) of the following contingencies. It should be noted that it is possible to find additional contingencies in a contract that are not listed here, as real estate deals are highly customizable. However, these are the most common types of contingencies, which you may be more likely to encounter.  

The Inspection Contingency

The inspection contingency allows homebuyers to have a home inspector assess the property’s physical condition.[1] The buyer may be able to terminate the purchase contract if they are not satisfied with the condition of the property.

The Financing Contingency

The financing contingency allows homebuyers the time needed to secure any home mortgage loan needed to complete the purchase. If the buyer is unable to obtain the necessary funding, the deal cannot proceed.[2] Sellers may be more willing to accept an offer from buyers who are pre-approved for a mortgage loan because this pre-approval may reduce the risk of the buyer failing to qualify for the necessary loan.  

The Appraisal Contingency

The appraisal contingency allows the buyer (or their lender) to order a home appraisal to confirm the property’s value. If the appraisal determines that the property is worth less than the price in the purchase contract, the buyer may renegotiate or cancel the contract.[3] In some cases, the buyer will choose to proceed with the purchase, knowing that they may be overpaying. However, the buyer may need to increase the down payment if they’re getting a mortgage on the property, since the lender is likely to base their loan amount on the appraised value rather than the agreed-upon purchase price.[3]

The Title Contingency

The title contingency allows the buyer to have the property’s title researched. If any liens against the property or third-party ownership claims are found during the title search, the buyer may be able to back out of the deal. 

The Home Sale Contingency

A home sale contingency allows the buyer to delay the closing or even cancel the purchase contract if they are unable to sell their current home to access the funds needed to buy the new home.

Under Contract vs. Active Under Contract

Under contract is a general term that simply means a buyer and seller have a signed purchase agreement; it gives no indication regarding the status of contingencies. By contrast, active under contract means that there are active contingencies still to be met.  

Active Under Contract vs. Pending Status

While active under contract indicates that there are active contingencies to be met, a pending status on a listing means that all contingencies have been met and the deal is on track to close. From this point, it may only be a week or two until the deal can close. 

Because all contingencies have been met, a pending listing is less likely to fall through than an active-under-contract listing. 

Active Under Contract vs. Clear to Close

Active under contract is the earliest phase of the contract period during which active contingencies must be satisfied. Clear to close, on the other hand, is the final stage of the contract period when all contingencies have been met and the mortgage loan has been approved for funding (this is more specific than the pending status, which does not specify whether the loan has been approved for funding). From this point, it may be just a matter of days until the deal closes.   

Listing Status FAQs for Homebuyers 

Does Active Under Contract Mean Sold?

No. Sold means that the deal has been finalized and the property has been transferred from the seller to the buyer. Active under contract means the listing is still technically active, and the buyer and seller are working through the contingencies.

Can Offers Be Made on Active-Under-Contract Listings?

Yes, but any offer accepted on an active-under-contract listing is a back-up offer, which may not be executed unless the first purchase agreement is terminated by the under-contract buyer or seller. 

How Often Do Real Estate Deals Fall Apart Once a Contract Is Signed?

The percentage of deals that fall through varies by region and fluctuates with changing market conditions. For reference, around 7% of contracts were terminated in the first quarter of 2025.[4]

Should Buyers Add More Contingencies to Protect Their Interests?

Adding contingencies is a balance between protecting yourself and incentivizing the seller to accept your offer. A seller may think twice about accepting a purchase offer that includes excessive contingencies because each contingency represents a hurdle to closing the deal. In fast-paced markets where sellers have more leverage than buyers, some buyers even waive common contingencies to make their offer more appealing to the seller. You may want to consult with a real estate agent for guidance on making a balanced offer. 

Listing Status FAQs for Home Sellers 

Can Sellers Continue Showing an Active Under Contract Home to Buyers?

Yes, sellers can continue showings while working through contingencies with an under-contract buyer. However, there may be less interest from other buyers, as many buyers know that under-contract listings are likely to proceed to closing. 

Can Sellers Accept Backup Offers?

Yes, sellers can accept back-up offers on under-contract listings. However, the first offer takes priority, and the back-up offer cannot be executed unless the first offer is terminated in accordance with the purchase agreement.[5]

Can Sellers Terminate a Signed Purchase Agreement If a Better Offer Comes Along?

Generally, sellers are bound to honor the active purchase agreement unless that deal falls through. While they can accept back-up offers, sellers cannot unilaterally cancel an existing purchase agreement in favor of a better offer.[5]

Recap: Under Contract vs. Active Under Contract vs. Contingent vs. Pending vs. Clear to Close 

To recap:

  • Under contract: A general term used to describe any listing in which a buyer and seller have a signed purchase contract in place.
  • Active under contract: A listing in which the buyer and seller have agreed to terms and signed a purchase contract, but there are active contingencies to be satisfied before the deal can proceed.
  • Contingent: Synonymous with active under contract, for all intents and purposes. Contingent means that the buyer and seller have agreed to terms, but the conditions of the deal must be met before it can proceed.
  • Pending: A listing in which the buyer and seller have a signed contract and all contingencies have been satisfied. 
  • Clear to close: A listing in which the buyer and seller have a signed purchase agreement, all contingencies have been met, the loan is fully approved for funding, and the deal is ready to close.  

Final Thoughts on Active Under Contract

Active-under-contract listings are statistically likely to proceed to closing, but because there is a chance that the signed contract could be terminated, some sellers may be open to accepting backup offers on these properties.

Whether you’re buying or selling a home, understanding how terminology applies to listing statuses can help you make more informed decisions as you navigate the real estate market.