Zillow Active Under Contract: What It Means for Buyers & Sellers

On Zillow, you can see the status "Active Under Contract" when looking at homes. As a buyer, you may be thinking about whether the home is still for sale. If you're a seller, you might wonder how this will affect your listing. To successfully navigate the real estate market, one must be aware of the Zillow Active Under Contract status. What it means, how it impacts buyers and sellers, and what to do when a listing shows as "Active Under Contract" are all covered in this article.

Zillow Active Under Contract: What Does It Mean?

Active Under Contract on Zillow shows that though a seller accepted a buyer's offer, the deal has not yet been finalized. The deal is still pending and often depends on a number of factors, like an inspection, finance approval, or the sale of a different property. Active Under Contract indicates the seller is still open to receiving backup offers in the event that the present contract falls through, in contrast to a Pending status, which indicates that a deal is almost completed.

The difference between "Pending" and "Under Contract."

In real estate, "under contract" and "pending," which many people mistake, have different meanings:

• Under Contract: Although an offer has been accepted by the seller, the sale is bound by a number of restrictions. In the unlikely scenario that the purchase falls through, the house may still consider backup bids.
• Pending: The contract is getting closer to closure once every contingency has been resolved. The possibility of the deal failing at this point greatly decreases.

If a house is under contract and you're a buyer interested in it, you could still be able to buy it if the present agreement falls through.

Is It Possible to Make an Offer on a Home Under Contract?

Considerations for Sellers and Backup Offers

Buyers can sometimes submit backup offers even while a house under contract is not for sale. In the event that the current contract does not close, the seller can have a backup offer ready.

Backup offers may be considered by sellers when:

• Financing is proving to be quite a challenge for the present buyer.
• Serious problems were found during the house inspection.
• The buyer finds it hard to sell their current house if it is a condition of the sale.

Making a backup offer puts you in a good position if the purchase falls through, but it does not ensure that you will receive the house.

How a Backup Offer Is Made

To improve your chances of finding an asset that is under contract, do the following:

• Consult with a real estate agent: They can determine the seller's willingness to accept backup bids.
• Make a strong backup offer: Consider matching or exceeding the first offer price.
• Be flexible: Offer a short closing date or, if at all possible, waive limitations.
• Be patient: If the first auction goes through, you may not get the house, but if it doesn't, you'll be the next person in line.

The majority of properties under contract eventually go to close; however, backup offers are available. Deals do, however, occasionally go through, so having a plan could assist you.

How Should a "Under Contract" Situation Affect Buyers and Sellers?

For Buyers Interested in a Contract Home
If you're thinking about purchasing a house that has a contract already:

• Keep an eye on the listing: If it changes to "active," the transaction has failed.
• Submit a backup offer: This raises your chances of obtaining the property if the main deal fails.
• Look for options: Because most under-contract houses go too close, don't rely just on one property.

For Sellers Having a Contract for Their Home
If an agreement is in place for the sale of your house:

• Verify the buyer's financial health: To lower financing risks, work with pre-approved purchasers.
• Get your house ready for inspection: Before listing, take care of any known issues to avoid unexpected expenses.
• Take backup offers into consideration: Should you obtain a compelling backup offer, it may provide protection in the event that the current arrangement fails.

What Causes the Failure of a Contract Home?

Problems with Finance
Buyer financial issues constitute one of the most common causes of contract failure. A buyer's contract may be terminated even if they are pre-approved if they have problems like losing their job, having their credit score changed, or being denied by a lender.

Sellers usually choose proposals from pre-approved purchasers rather than those who are only pre-qualified for a mortgage in order to lower this risk.

Contingencies for Home Inspections
A buyer may back out or renegotiate terms if issues found during a house inspection are disclosed. Typical inspection problems consist of:

• The structural problems (foundation fractures, roof damage)
• Plumbing or electrical problems
• Infestations of insects, mold, or asbestos
• Failures of HVAC systems

The buyer may decide to back out of the sale if the seller is reluctant to make any major repairs.

Appraisal Inconsistencies

To make sure the home's worth is equal to the mutually agreed-up purchase price, lenders need an appraisal. If the appraisal comes in lower than expected, purchasers may struggle to gain financing, or they may request a price reduction. The transaction could fail to go through if the seller declines.

Title Concerns

A title search ensures that the property is without title problems, outstanding liens, and legal issues. Any issues must be fixed before closure otherwise the contract may be invalid.

Buyer's Remorse Or Changes In Life

Buyers may alter their minds for private reasons, such as cold feet regarding the purchase, familial issues, or job relocation. Some agreements let buyers back out at any time, but they risk forfeiting their earnest money deposit if they do so too late.

Buyers and sellers can make better selections if they are aware of the Zillow Active Under Contract status. In order to ensure an effortless closure, sellers should effectively manage contingencies, while buyers should remain proactive and think about making backup offers. Working with an experienced real estate agent will help you take advantage of possibilities and steer clear of potential traps when handling an Active Under Contract listing.