What Does It Mean When a House is Under Contract?

Learn what it means when a house is under contract, why it’s important, and how it impacts buyers and sellers. Real-life examples, case studies, and statistics included.

Understanding the Concept

When a house is under contract, it means that the seller has accepted an offer from a potential buyer, but the sale has not yet been finalized. This stage is crucial in the home-buying process as it marks the beginning of negotiations and inspections.

What Happens During This Time?

During the period when a house is under contract, both parties work towards meeting the contingencies outlined in the contract. This typically includes the buyer obtaining financing, conducting a home inspection, and possibly selling their own home.

Why Is It Important?

Having a house under contract is a significant milestone for both buyers and sellers. For the seller, it means they have a potential buyer lined up, while for the buyer, it offers some security that the property will not be sold to someone else during this period.

Real-Life Examples

Consider this scenario: John puts in an offer on a house and after negotiations, the seller accepts. The house is now under contract, and John has a specific window of time to secure financing and complete inspections before closing the deal.

Case Studies

  • Case Study 1: Sarah’s house was under contract for 30 days before the buyer’s financing fell through, resulting in the deal being terminated.
  • Case Study 2: Tom’s house was under contract for two weeks, and after a successful home inspection, the sale closed without any issues.


According to the National Association of Realtors, about 5% of home sales fall through after the contract is signed due to financing issues, inspection problems, or appraisal discrepancies.

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