What Does Active Under Contract Mean?

Active under contract means the seller has accepted a buyer’s offer, but they’re also accepting backup offers. Sellers might continue to accept backup offers if they think their current deal isn’t guaranteed, or if they just want to keep their options open. At the end of the day, a deal isn’t final until closing. If you see a house you love and it’s listed as ‘active under contract’, you might be able to put in an offer. 

In this article, we’ll discuss what active under contract means, how it’s different from a pending sale, and how these types of listings work. We’ll also cover what causes a home sale to fall through, and how long an ‘active under contract’ home stays on the market.

Why are homes listed as active under contract?

Homes are listed as active under contract to indicate that the home sale is not finalized and that the seller is open to receiving backup offers. Purchase contracts on these homes usually have contingencies that must be met before the sale can proceed. 

Contingencies are conditions included in a purchase contract to protect the interest of the buyer, seller, or both parties. Once all contingencies are met, the sale can move forward. However, if one or more contingencies are not met, the deal can be canceled.

The buyer and seller have a certain amount of time, usually 30-60 days, to settle purchase contract contingencies. During this time, new buyers can visit the property and put in backup offers. This allows sellers to keep their options open and motivates buyers to hold up their end of the deal. 

Active under contract vs. under contract

Active under contract homes work differently than homes simply under contract. The term ‘active under contract’ implies that the property remains active on the market and the seller is accepting backup offers, whereas ‘under contract’ implies that the property is no longer on the market and the seller is not accepting backup offers.

Active under contract vs. pending sale

Active under contract and pending statuses are similar, but they represent different stages in the home sales process. Homes that are pending sale have passed the active under contract or under contract stage and are one step closer to closing. By the time a property is pending sale, all purchase contract contingencies have been met. Houses pending sale are usually waiting on title searches, final walkthroughs, and closing disclosures. 

How do active under contract listings work?

Buyers can make an offer and schedule a viewing for a listing that’s active under contract. However, any offers submitted during the ‘active under contract’ phase are considered backup offers. Sellers can’t break their current purchase contract to accept a new offer, even if the new offer is better. Sellers can only consider backup offers if and when the original home sale falls through.

What causes a home sale to fall through?

A home sale can fall through for several reasons, whether the property is pending sale, under contract, or active under contract. According to sellers in a 2024 Zillow survey, the most common reason why an offer fell through was issues with money, mortgage, or financing (40%). When a sale falls through on a home that is active under contract, it’s usually because one of the following contingencies was not met, canceling the purchase agreement.

• Buyer has a financing contingency and is unable to secure a mortgage loan by a specific deadline.
• Buyer has an appraisal contingency, and the home is valued lower than the purchase price, but the seller does not want to sell for less.
• Buyer has an inspection contingency, and the home inspection reveals major property damage that the seller does not want to pay to repair or renegotiate the sale price to compensate.
• Buyer has a home sale contingency that protects them from paying two mortgages simultaneously, and their current home does not sell before closing on the new home.

Improve your chance of your offer being accepted by getting pre-approved for a mortgage with us at Zillow Home Loans*. 

How often do purchase contracts fall through?

When a purchase contract is canceled or delayed, it’s typically due to issues with the home inspection, home appraisal, or financing approval. While less common, real estate deals can also fall apart if a property lien is discovered, or if a buyer suddenly loses their job. 

According to a 2024 Zillow survey, sellers reported having a 50/50 split when it came to having at least one offer fall through. The share of sellers that self-report having an offer fall through trends much higher than the share of for-sale listings that return from Pending to For Sale, which has wavered between 1% and 4% according to internal Zillow data. When sellers self-report, they are likely also including cases where they experienced a delay or surprise hurdle before closing — or cases where an offer they ultimately did not accept got withdrawn. Both measures, though, can help reveal market conditions and how favorable they are for sellers and buyers.

How long do homes stay active under contract?

Homes typically stay active under contract for 30-60 days. However, the exact time a property remains active under contract depends on the local market, the terms of the agreement, and the types of contingencies included in the purchase contract. Competitive markets typically have shorter purchase contract deadlines, while slow markets might have longer timeframes. Sellers can also extend a purchase contract deadline if they’re eager to close the deal.

Can you make an offer on an active under contract home?

Yes, you can make an offer on an active under contract home. Have your agent reach out to the seller’s agent to find out if the seller is still accepting offers. If they are, your agent should find out what’s most important to the seller, so you can put together a compelling backup offer. While a seller can’t officially accept your offer until the sale has fallen through, they can compare your backup offer to other offers they’ve received in the meantime. If you’re looking for an agent, consider working with a Zillow Premier Agent partner to find and buy a home.

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