What Does “Under Contract” Mean Anyway?

If you’re in the market for a new home, you’ve probably seen properties listed as “Under Contract.” But what does that mean exactly? And more importantly, can you still make an offer?

Let’s break down the basics of an “under contract” home.

What is “Under Contract?”

Under contract simply means that the home seller has accepted an initial offer from a buyer. In other words, the transaction is pending.

The under contract phase spans from offer to closing (transferring the title and deed of the home). This process takes about a month if you’re prepared; longer if you run into snags.

During this time, a lot of background checks and balances occur. Things like:

  • Home inspections

  • Pest inspections

  • Purchase agreements

  • Loan approval

  • Request for repairs

  • Fund deposits

  • And more…

There are a lot of items that need to be checked off by both the buyer and seller before the home can be considered “sold!”

Can You Submit An Offer Anyway?

Yes, you can (and should) still submit an offer to the seller if you’re particularly interested in the home. Submitting as a backup lets you be “next in line” if buyer #1 backs out.

Common Reasons Buyers Back Out

Buyer’s mortgage application was declined: There are two main reasons this occurs. 1) The buyer doesn’t qualify for financing and 2) The buyer has too short a credit history.  

Home or pest inspection failures: Buyers can (and should) have a contingency in their offer that if the home fails its inspection, they can pull out of the sale. If this happens, the home seller will need to fix the failure and pass an additional inspection. In the meantime, you may have the opportunity to purchase the home.

Buyer can’t sell: If you’re not a first-time homebuyer, you need to sell your old home before you can move into a new one. If they can’t sell in X amount of days, they can often pull out.

From Under Contract to SOLD

Upon closing, the buyer deposits funds from their bank and the seller deposits the deed of the home. Once both have been deposited, each party will have access to the other’s and the transaction is final. The home is finally removed from its under contract status and updated to SOLD.   

For guidance on buying, selling, and getting to that “under contract” phase, contact Frontgate Realty Group. We can help you navigate the complex world in Denver real estate.

Call us at (303) 300-9129!


Kelsey Anderson