What Does Under Contract Mean on Zillow? A Simple Guide for Buyers and Sellers

When browsing homes on Zillow, you’ve likely come across the term “under contract” and wondered what it really means. For buyers and sellers, understanding this phrase is crucial as it marks a significant step in the home-buying process. It’s more than just a status update—it reflects a binding agreement that can impact your next move.

Real estate jargon can often feel overwhelming, but breaking it down makes it easier to navigate. Knowing what “under contract” signifies on Zillow helps clarify whether a property is still an option or officially off the market. Whether you’re actively searching for a home or just curious about the process, understanding this term provides valuable insight into how real estate transactions unfold.

Understanding “Under Contract” On Zillow

The “under contract” status on Zillow means a seller accepted a buyer’s offer, and both parties signed a purchase agreement. While the property is technically not sold yet, it’s no longer actively listed as available to other buyers.

This stage lets the buyer perform due diligence, such as inspections and securing financing, before finalizing the sale. If any issues arise, the agreement could be canceled, returning the property to the market.

For those searching on Zillow, this status signifies that submitting a new offer is usually not an option unless the current contract falls through. Sellers consider this phase a step closer to closing but remain prepared for contingencies.

The Meaning Of “Under Contract” In Real Estate

“Under contract” in real estate means a seller has accepted an offer, and both parties have signed a purchase agreement. While the sale isn’t complete, the property is on hold as the buyer works through contingencies.

Common Misconceptions About “Under Contract”

Many believe “under contract” guarantees a sale, but that’s incorrect. The buyer’s financing, inspections, or appraisal may fail, causing the deal to fall apart. It also doesn’t mean the closing process has started. Instead, it signals that contingencies must be resolved before moving forward.

Some think submitting a backup offer is pointless when a home is under contract. This is false because if the first contract fails, backup offers provide sellers with other options.

Difference Between “Under Contract” And “Pending”

“Under contract” refers to an agreement with ongoing contingencies. For example, inspections, appraisals, or financing conditions remain unsettled.

“Pending” signals that contingencies have been cleared, and the closing process is likely underway. At this stage, the property is almost ready for transfer to the buyer, barring unforeseen delays.

How “Under Contract” Impacts Buyers And Sellers

The “under contract” status on Zillow affects both buyers and sellers differently, as it marks an important step in the real estate process. Understanding this stage helps both parties make informed decisions.

What It Means For Buyers

Buyers face limited opportunities with “under contract” properties. While the primary agreement is active, submitting new offers is rare unless the initial deal fails. Backup offers, however, allow buyers to remain in line for consideration.

Buyers may also encounter delays or uncertainty depending on the contingencies outlined in the initial contract. These include inspections, appraisals, and financing, which must be satisfied for the sale to proceed. If any party backs out, the property might return to the market.

What It Means For Sellers

Sellers view “under contract” as progress toward completing their sale. They typically do not entertain new offers during this phase, focusing instead on meeting contingency requirements and completing necessary steps like repairs agreed upon with the buyer.

If the buyer’s financing falls through or contingencies are unmet, the agreement may be terminated, delaying the sale process. Sellers often remain prepared for this possibility, which is why having backup offers can provide additional options.

Can A House Under Contract Still Be Purchased?

A house under contract typically cannot be purchased directly unless the current agreement fails. Interested buyers may explore backup offer options, which position them as the next potential buyer if the initial contract does not close.

Conditions That Could Terminate A Contract

Contracts for properties under contract may terminate due to several reasons:

  • Financing Issues: Buyers could fail to secure the necessary loan to proceed.
  • Inspection Results: Adverse findings from home inspections, such as major structural damage, often result in cancellation.
  • Contingency Disputes: Unresolved contingencies like appraisal values falling short of the agreed sale price may void the agreement.
  • Buyer Withdrawal: Buyers may back out if timelines or personal circumstances change, especially prior to earnest money becoming non-refundable.

These scenarios allow the property to return to the market, creating opportunities for new offers.

Tips For Buyers Interested In Under Contract Properties

Buyers interested in properties marked as “under contract” can follow these steps:

  • Submit A Backup Offer: Backup offers secure a secondary position, ensuring priority if the existing contract fails.
  • Monitor Status Changes: Check for updates on the property’s Zillow listing to know if it shifts back to “For Sale.”
  • Communicate With Agents: Real estate agents can provide insights into the likelihood of a deal falling through.

Remaining proactive allows buyers to seize new opportunities promptly if the first contract is canceled.

Importance Of Knowing A Property’s Status On Zillow

Understanding a property’s status on Zillow helps buyers and sellers make informed decisions. Buyers can save time by focusing only on homes actively listed for sale instead of those under contract. This avoids pursuing properties unlikely to accept new offers.

For sellers, accurately reflecting a property’s status ensures transparency. It reduces inquiries about unavailable homes and keeps the listing process efficient. Buyers viewing properties marked “under contract” better appreciate the progress of a listing and know to focus on backup options if interested.

Real estate agents rely on this status to communicate with their clients about property availability. A clear understanding of the status supports better planning for showings, offers, and negotiations. Recognizing status updates also keeps potential buyers aware of opportunities if a contract falls through.

Tracking the status on platforms like Zillow simplifies decision-making. Buyers and sellers avoid unnecessary delays by staying updated on current information about market availability.

Conclusion

Understanding the “under contract” status on Zillow is crucial for navigating real estate transactions effectively. It provides clarity on a property’s availability, helping buyers and sellers make informed decisions. While this status signals progress, it also highlights the importance of contingencies and the potential for deals to fall through. Staying informed about these nuances ensures a smoother experience for all parties involved.

Frequently Asked Questions

What does “under contract” mean on Zillow?

“Under contract” on Zillow means the seller has accepted an offer, and both parties have signed a purchase agreement. The property is no longer actively available for other buyers, although the sale isn’t final yet as it depends on contingencies like inspections and financing.

Can a house under contract still be bought?

Typically, no. A house under contract cannot be purchased unless the current deal falls through. Interested buyers might consider submitting a backup offer to be next in line if the initial contract is canceled.

What is the difference between “under contract” and “pending”?

“Under contract” indicates that contingencies like inspections or financing are still being resolved. “Pending” means all contingencies have been met, and the sale is closer to closing.

What happens if a contract falls through?

If a contract falls apart due to issues like financing, a failed inspection, or a buyer withdrawing, the property may return to the market. This allows new buyers to submit offers.

Should buyers still contact the seller if a property is under contract?

In most cases, it’s not necessary to contact the seller. However, you can speak with an agent about submitting a backup offer to position yourself in case the current contract fails.

Why is the “under contract” status important for buyers?

For buyers, “under contract” means fewer opportunities, as submitting a new offer on the property is unlikely. It also reflects uncertainty, as contingencies like inspections and financing could cause delays or even cancel the deal.

Why is the “under contract” status important for sellers?

For sellers, “under contract” represents progress toward completing the sale. It shows commitment to the buyer while focusing on meeting contingencies. Sellers generally don’t entertain new offers during this phase unless the current deal fails.

Can the “under contract” status change?

Yes, the status can change if the deal is canceled due to unmet contingencies, like failed financing or inspection issues. If this happens, the home may return to an “active” status on Zillow.

Should buyers consider making a backup offer?

Yes, a backup offer can be beneficial. It ensures you’re next in line if the current contract fails, giving you an opportunity to purchase the property without competing with new buyers.

How does “under contract” affect a property’s visibility on Zillow?

A property marked as “under contract” is still visible on Zillow but is no longer actively listed as available. Buyers can see the status to avoid inquiring about unavailable homes, saving time and effort.


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