Active Under Contract: What It Means for Buyers and How to Make a Backup Offer

An "active under contract" status means a seller has accepted an offer but is still welcoming backup offers, as the sale is not yet final. This status typically lasts 30-60 days while purchase contract contingencies—conditions that must be met for the sale to proceed—are settled. For buyers, it represents a clear opportunity to pursue a property that appears off the market. Understanding this status, how it differs from "pending" sales, and the strategy for submitting a competitive backup offer is crucial for navigating a competitive housing market.

What Does ‘Active Under Contract’ Mean?

A home listed as active under contract indicates the seller has a signed purchase agreement with a buyer, but the deal is not finalized. The seller remains open to receiving backup offers because the sale is contingent on specific conditions being met. This status is a hedge against the deal falling through, which, based on industry data, happens in a measurable percentage of transactions. It informs other potential buyers that while the property is under agreement, they may still have a chance to purchase it if the primary offer fails.

How is ‘Active Under Contract’ Different from ‘Pending Sale’?

The main difference between "active under contract" and "pending sale" lies in the progression of the sale process. A home that is active under contract is still in the due diligence phase, where contingencies like financing, appraisal, and inspections are being evaluated. In contrast, a pending sale status generally means all major contingencies have been satisfied, and the transaction is advancing toward closing, involving final steps like the title search and final walkthrough. A pending status suggests a much lower likelihood of the sale collapsing.

Why Would a Home Sale Fall Through?

A home sale can fall through for several reasons, most commonly related to unmet contingencies. According to a 2024 survey of sellers, issues with financing were the leading cause of failed offers, cited by 40% of respondents. The primary contingencies that can derail a deal include:

• Financing Contingency: The buyer fails to secure a mortgage loan by the deadline.
• Appraisal Contingency: The property's appraised value comes in lower than the purchase price, and the buyer and seller cannot renegotiate.
• Inspection Contingency: The home inspection reveals significant defects that the seller is unwilling to repair or compensate for in the sale price.
• Home Sale Contingency: The buyer’s own home does not sell by the specified date, preventing them from moving forward.

How Can You Make an Offer on an Active Under Contract Home?

Yes, you can make an offer on a home that is active under contract. Your offer will be treated as a backup offer, which the seller can only formally accept if the primary deal falls through. To improve your chances, follow these steps:

1. Have Your Agent Communicate: Your real estate agent should contact the seller’s agent to confirm the seller is indeed accepting backup offers and to understand the seller’s key motivations (e.g., a quick closing, a higher price, or specific terms).
2. Strengthen Your Offer: Make your backup offer as attractive as possible. This often involves getting pre-approved for a mortgage, making a strong earnest money deposit, and minimizing unnecessary contingencies.
3. Be Patient and Prepared: The seller cannot break the existing contract for a better offer. You must be prepared to wait until the contingency period expires, and you should continue your search for other properties in the meantime.

In essence, an active under contract listing is a calculated risk that can pay off for persistent buyers. By submitting a strong, well-prepared backup offer, you position yourself as the next in line should the initial agreement fail.