What Does Under Contract Mean in Real Estate?

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In the world of real estate, there are many terms and phrases used that can be incredibly confusing to anyone who is not ingrained in the industry. "Under contract" is one such term--it is often confused by the general public as property that has already sold, which is not the case.

Pending Contract

The term "under contract" is used in real estate to indicate that there is a pending contract on the property, but it has not yet sold or closed.

Read More: How to Break a Construction Contract


Other interested buyers in the area and their respective agents need to know if a home is already under contract so that they can determine if it is worth the time to look at the property.

Time Frame

Almost always, there is a time frame written into the contract denoting by what date the property will sell (also called close) before the contract will expire, and the property will return to the market.


Just because a property is under contract does not necessarily mean that it is off the market. Other buyers may be able to make offers on the property, depending on if there is a first right of refusal clause in the contract.


The laws that govern the term "under contract" vary from state to state, and country to country.


Always seek the advice of an attorney about any legal questions involved in the buying or selling of real estate.