Zillow has become a trusted resource for anyone navigating the real estate market, whether you’re buying your first home, investing in property, or simply exploring options. However, understanding the various listing statuses displayed on Zillow, such as “for sale,” “pending,” and “under contract,” can sometimes be confusing.
One question that pops up frequently is, “What does ‘under contract’ mean on Zillow?” Knowing what this status signifies and its implications can save you time and frustration during your house-hunting process. This guide will break it all down for you, step by step.
What Does “Under Contract” Mean in Real Estate?
When you see “under contract” on Zillow, it means that the seller has accepted an offer from a buyer, and they’ve entered into a legally binding agreement.
However, the sale is not yet finalized. There are still certain steps that both the buyer and seller need to complete before the house officially changes hands.
Here’s the important nuance: While the property is likely on its way to being sold, the deal isn’t sealed just yet. This status allows for specific contingencies to be addressed before closing.
Key takeaway: A house that is “under contract” is not officially sold, but it is no longer actively open for offers. However, opportunities may still arise, as we’ll explain later.
Contingencies in Real Estate Contracts
An “under contract” status often depends on several contingencies. These are conditions that must be met for the sale to proceed. If these contingencies fall through for any reason, the property could return to the market. Here are the most common contingencies to know:
Financing Contingency
Many buyers include a financing contingency in their offer. This means that the sale is conditional upon the buyer securing a mortgage loan.
If the buyer is unable to get approved for a loan, the sale falls apart, and the property usually goes back on the market.
Inspection Contingency
Before committing to the purchase, buyers often request a home inspection to identify potential issues, such as structural problems or faulty wiring.
If the inspection reveals significant problems, the buyer can negotiate repairs, request a lower price, or withdraw their offer entirely.
Appraisal Contingency
Lenders require an appraisal to ensure that the property’s value matches or exceeds the loan amount. If the home appraises for less than the agreed purchase price, the buyer and seller may need to renegotiate, or the sale could fail.
Other Contingencies
Additional contingencies, such as the sale of the buyer’s current home or clearance of liens on the property, can also affect the “under contract” status.
Why it matters: Understanding these contingencies can give buyers insight into why a property’s status might change and even give you an edge when crafting a backup offer.
What Happens After a House is Under Contract?
Once a house is under contract, a series of events are set into motion. While these steps can vary based on the property and agreement, the overall process typically includes:
- Inspections
A home inspection is conducted to identify any major issues that could affect the sale. Both parties can negotiate repairs or adjust the contract based on the findings.
- Appraisal
The lender orders a home appraisal to confirm that the property’s value aligns with the agreed-upon purchase price.
- Final Negotiations
If issues arise during inspections or appraisals, buyers and sellers may enter another round of negotiations to adjust terms, repairs, or pricing.
- Loan Approval
The buyer works with their lender to finalize their mortgage terms and secure full loan approval.
- Closing Preparation
Once all contingencies are resolved, the buyer and seller prepare for the closing date, which involves signing paperwork and transferring ownership of the home.
Pro tip: The time between going under contract and closing can vary, but generally takes 30 to 60 days. Delays can happen, so patience and consistent communication are key.
Can You Still Make an Offer on a House That’s Under Contract?
Yes, you can make an offer on a house that is under contract, but there’s a catch. Once a property goes under contract, it’s considered “off the market,” meaning the seller is not actively accepting other offers.
However, as a potential buyer, you can approach the seller with a backup offer.
What is a Backup Offer?
A backup offer is essentially a contingency plan for the seller. If the existing contract falls through due to unmet contingencies, your backup offer could move forward.
This approach ensures you’re next in line without disrupting the original agreement.
Keep in Mind
- Backup offers are not guarantees but can be advantageous if you’re seriously interested in a property.
- Communicate with your real estate agent, who will guide you through the process and present your backup offer in the best possible light.
Bottom line: While the odds may be slim, making a backup offer is a savvy way to keep your options open when a property you love is under contract.
Tips for Buyers Navigating Under Contract Listings
If you find yourself eyeing a property that is under contract, here are some practical tips to keep in mind:
- Monitor the Status
Keep an eye on the property’s status on Zillow or your local MLS (Multiple Listing Service). If the deal falls through, you want to be ready to act quickly.
- Work with a Real Estate Agent
A good agent can help you stay informed about changes in the property’s status and assist with submitting a competitive backup offer.
- Have Your Finances in Order
Make sure you’re pre-approved for a mortgage so you can move quickly if the property becomes available.
- Explore Similar Listings
Don’t put all your energy into one property. Look for similar homes that meet your criteria to avoid disappointment.
- Stay Persistent
The real estate market can be unpredictable, but persistence can pay off. Keep searching, and don’t get discouraged if your dream home doesn’t pan out right away.
Final Thoughts on “Under Contract” Listings
Understanding what “under contract” means on Zillow is crucial for buyers and investors navigating the competitive real estate market.
While this status indicates that a property is no longer actively accepting offers, opportunities can still arise. By understanding contingencies, staying informed, and working with a reliable real estate agent, you can position yourself for success—even in a fast-paced market.
Looking to learn more? Check out our additional resources on real estate statuses and tips for first-time buyers to help you confidently find your dream home.
