When browsing homes on Zillow, it’s common to come across the term “under contract.” For those unfamiliar with real estate jargon, this phrase can spark questions about what it actually means and how it impacts a property’s availability. Understanding this status is crucial, especially for buyers eager to make an offer or sellers monitoring their listing’s progress.
In real estate, “under contract” signifies a significant step in the home-buying process. It indicates that a buyer and seller have agreed on terms, but the deal isn’t finalized yet. While the property is no longer actively accepting new offers, certain conditions must be met before the sale is complete. Knowing the implications of this status can help buyers and sellers navigate the next steps with confidence.
Understanding “Under Contract” On Zillow
The term “under contract” on Zillow refers to a property where the seller has accepted an offer from a buyer. This status doesn’t mean the sale is complete. Instead, it indicates the transaction is pending while specific conditions, like inspections or financing, are being finalized.
When a property is listed as “under contract,” it’s technically not available for other buyers. However, backup offers may still be accepted in case the initial deal falls through. This status helps potential buyers understand that the property is in the process of being purchased but not yet sold.
For sellers, this status marks a critical stage in the home-selling process. If the buyer meets the agreed-upon conditions, the sale will proceed to closing. If not, the property might return to active listing status. On Zillow, this label is designed to keep the listing process transparent for both buyers and sellers.
What Does “Under Contract” Mean?
“Under contract” refers to a property where the seller has accepted a buyer’s offer, but the deal hasn’t closed yet. This status signals that certain steps, such as inspections or financing, are still in progress.
Definition Of “Under Contract”
“Under contract” means the buyer and seller have signed a purchase agreement. The seller agrees to sell the property under specified terms, while the buyer commits to purchasing it. Before finalizing the sale, the buyer often completes inspections, secures financing, or obtains appraisal approval. If either party fails to meet these conditions, the contract may be canceled.
Key Differences Between “Under Contract” And “Pending”
- Status of Conditions: “Under contract” means outstanding steps, such as loan approval or inspections, remain. “Pending” suggests most conditions have been addressed, and the sale is near completion.
- Backup Offers: Sellers may accept backup offers on “under contract” listings. In contrast, “pending” listings rarely entertain such offers.
- Likelihood of Closing: “Under contract” properties have a higher chance of falling through versus “pending” properties, which are closer to closing.
How Zillow Displays “Under Contract” Listings
Zillow uses the “under contract” label to help users identify properties with accepted offers but incomplete sales. This status provides transparency regarding the property’s availability.
Identifying “Under Contract” Properties On Zillow
Users can find “under contract” listings directly in the property’s details section on Zillow. These listings are marked with a tag or label stating “under contract,” usually near the property image or description. When users select a listing, additional details about its status, such as pending conditions like inspections or appraisals, might be included in the description. Backup offers are sometimes mentioned, showing sellers may still consider other potential buyers.
Why A Home Might Go “Under Contract”
A home goes “under contract” because an offer has been accepted by the seller and a purchase agreement has been signed. The sale remains incomplete due to conditions like home inspections, financing approval, or appraisal results. During this phase, buyers and sellers work to meet these conditions. If either party fails to do so, the home may return to active status on Zillow.
Can You Make An Offer On “Under Contract” Properties?
It is possible to make an offer on a property marked as “under contract,” depending on the seller’s willingness to accept backup offers. However, buyers must consider the risks involved, as priority is given to the initial agreement.
Situations Where Offers May Still Be Accepted
Backup offers are often accepted if the current buyer faces issues completing the agreement. These issues may include failed inspections, financing problems, or unmet contingencies. For example, if a buyer’s financing isn’t approved in time, the seller might consider other offers before relisting the property.
Seller decisions impact whether backup offers are entertained. Some sellers expressly state that they allow additional offers during the “under contract” period, while others prefer to focus on finalizing the existing transaction. The property’s listing description or communication with the seller’s agent can clarify policies on backup offers.
Risks And Challenges Of Bidding On “Under Contract” Homes
Limited chances exist for the backup offer to proceed, as most contracts close successfully. Buyers should weigh the potential likelihood of the primary sale falling through, as the seller is obligated to the first buyer unless conditions remain unmet.
Delays in acceptance create uncertainty for the backup offer. Until the original contract resolves, backup buyers must often wait without guarantees. For instance, the original buyer’s appraisal results or financing approval could take weeks to conclude.
Non-refundable fees may apply. Buyers submitting backup offers or preparing for potential approval sometimes face costs for appraisals, inspections, or legal preparations. Without a guarantee of the deal proceeding, these costs can become losses.
How To Navigate Zillow Listings Effectively
Reading Zillow listings with a focus on property status helps users make informed decisions. Paying attention to details like labels, descriptions, and updates ensures better understanding of property availability.
Tips For Monitoring Status Changes
Checking listings regularly ensures users stay updated on property availability. Zillow often marks status changes, like “under contract” or “pending,” directly on the property page. Users can use filters to view specific statuses, reducing time spent searching.
Setting up alerts for changes ensures users get notified when a listing changes status or becomes active again. This feature can be accessed in the account’s notification settings.
Tracking timelines of “under contract” properties gives an understanding of how long similar statuses usually remain before finalization. This helps in planning future actions.
Working With A Real Estate Agent
Agents provide insights about Zillow statuses and explain terms like “under contract” clearly. They help buyers focus on viable options while watching for potential availability changes.
Agents often inquire directly with sellers or their agents about the likelihood of backup offers being accepted. Buyers receive strategic advice for improving their chances based on this information.
Agents streamline the buying process by identifying properties that fit the buyer’s needs and offering expertise on competitive backups. They assist in submitting strong offers while minimizing risks.
Conclusion
Understanding what “under contract” means on Zillow is essential for navigating the real estate process effectively. This status provides valuable insight into a property’s availability and the steps required to finalize a sale. Whether you’re a buyer considering backup offers or a seller managing conditions, knowing how this label impacts transactions can help you make informed decisions.
By staying attentive to property statuses on Zillow and working with a knowledgeable real estate agent, users can better position themselves in the competitive housing market. With the right approach, both buyers and sellers can navigate the complexities of “under contract” listings with confidence.
Frequently Asked Questions
What does “under contract” mean in real estate?
“Under contract” means the buyer and seller have agreed on terms for a property and signed a purchase agreement. However, the sale is not final until specific conditions, such as inspections, financing, or appraisals, are met.
Can a property under contract still be bought by another buyer?
Generally, no. Properties under contract are unavailable for new buyers unless the seller is accepting backup offers. If the initial contract falls through, backup offers may be considered.
How is “under contract” different from “pending”?
“Under contract” means there are still conditions to fulfill, while “pending” indicates most conditions have been met and the sale is closer to completion.
Can backup offers be submitted for a property under contract?
Yes, many sellers allow backup offers on properties under contract. However, the primary buyer has priority, so backup offers only proceed if the original deal fails.
What happens if conditions under an “under contract” status are not met?
If conditions like financing or inspections are not fulfilled, the contract may be canceled, and the property can return to active status.
How does Zillow display properties that are under contract?
On Zillow, properties under contract are labeled as such in the details section. The tag often includes information about conditions, like pending inspections or financing.
Is it risky to make a backup offer on an “under contract” property?
Yes, submitting a backup offer involves risks, as the initial agreement takes priority. Buyers may incur non-refundable expenses like appraisals or inspections if the primary sale proceeds.
Why do properties under contract fall through?
Deals may fall through due to failed inspections, financing issues, or unmet terms in the purchase agreement, leading the property to be relisted.
How can a real estate agent help with properties under contract?
Real estate agents provide valuable insights, help negotiate backup offers, and guide buyers through risks and requirements, ensuring a smoother transaction process.
How do I stay updated on the status of properties on Zillow?
Use Zillow’s alert tools to monitor changes in property status. Regularly check listings and pay attention to updates, descriptions, and labels for the latest information.
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