What Does Under Contract Mean in Real Estate?

by Ranjani Ravi

What Does “Under Contract” Mean in Real Estate? A Complete Guide for Home Buyers

At Ranjani Ravi Realty, we believe informed buyers make the best homeowners. In this guide, we’ll walk you through what "under contract" really means in real estate, why it matters, and how it affects your home-buying journey, so you can move forward with confidence and clarity.

What Does "Under Contract" Really Mean?

When a home is listed as “under contract,” it means the seller has accepted an offer from a buyer, and both parties have signed a purchase agreement. However, the sale is not finalized yet. The property will remain in this stage while important conditions, known as contingencies, are met.

Think of this phase as the middle ground: the home is spoken for, but there are still a few important steps before it becomes officially sold.

What Are Contingencies?

Contingencies are conditions built into the purchase agreement that must be satisfied before the sale can close. Common examples include:

Home inspection
Appraisal
Financing approval
Title verification

These protections allow both the buyer and seller to address key concerns and confirm that the transaction is proceeding as expected. At Ranjani Ravi Realty, we help buyers understand and navigate these conditions, so there are no surprises along the way.

Can You Still Make an Offer on a Home That’s Under Contract?

In many cases, yes. While the home is under contract, you can submit a backup offer. This means if the first buyer’s deal falls through, your offer could move into first position.

Backup offers can be a smart strategy in competitive markets, and our team can help you craft a strong, ready-to-go offer if this opportunity arises. We always recommend having your financial pre-approval ready so you can act quickly.

How Often Do “Under Contract” Deals Fall Through?

It’s rare, but it does happen. Nationally, about 3–5% of real estate deals fall through before closing. Common reasons include:

Unfavorable inspection results
Financing issues
Buyer’s remorse
Disagreements over repairs or closing terms

When you're working with Ranjani Ravi Realty, we stay ahead of these potential setbacks by guiding you through each phase with clear expectations, sound strategy, and responsive support.

What Happens After All Contingencies Are Met?

Once all contingencies are resolved and both sides are ready to move forward, the home transitions from “under contract” to “sold.” This usually happens at the closing, when the final paperwork is signed, the funds are transferred, and the keys are handed over.

Ranjani Ravi Realty makes this final step smooth and stress-free. We coordinate with lenders, title companies, and attorneys to ensure everything is in place for a successful closing.

Common Pitfalls and How to Avoid Them

Home purchases can hit roadblocks if deadlines are missed, financing falls through, or paperwork isn’t in order. That’s why it’s crucial to have a real estate team that pays attention to every detail.

At Ranjani Ravi Realty, we review your contract thoroughly, monitor timelines, and communicate clearly so that your home purchase stays on track from beginning to end.

How Ranjani Ravi Realty Supports You

When you work with Ranjani Ravi Realty, you're getting more than just a real estate agent—you’re gaining a dedicated partner who:

Breaks down the fine print in simple terms
Helps you understand each stage of the contract
Keeps your goals and timeline top of mind
Advocates for your best interests
Ensures a seamless transition from offer to ownership

Moving Forward With Confidence

Buying a home is one of the most important financial decisions you’ll ever make. Understanding the process—especially what “under contract” means—can help you avoid stress and make empowered choices.

Let Ranjani Ravi Realty be your guide. Whether this is your first home or your fifth, we’ll make sure the process is smooth, the paperwork is solid, and your goals are fully supported.

Ready to Seal the Deal With Confidence?
Contact Ranjani Ravi Realty today and experience a seamless journey from contract to close.