A home under contract means a contract has been signed by both a buyer and seller. The contract details how much the buyer has offered and any contingencies they are asking for (which we explain below). Earnest money is typically paid and placed in an escrow account when the contract is signed.
Houses under contract might also show an additional status of “Show” or “No Show” in the MLS. Show means the homeowner is willing to have other potential buyers view the home. No Show means the opposite. Because they have a contract and are getting closer to making a final sale, they are not allowing agents to conduct tours or showings.
What Does Contingent Mean?
A house listed as “contingent” is also under contract. Contingent means that both parties are waiting for all of the requirements listed by the buyer to be addressed. These often include:
Inspection. The sale is contingent on any flaws found by a professional home inspector being fixed by the seller, or the sales price lowered accordingly. If the two parties cannot agree about how the issues will be resolved, the buyer can back out.
Financing. Even though a buyer may have pre-approval, they may have trouble securing financing when it comes to getting the loan. This could stop the sale from proceeding.
Appraisal. If the house is appraised for less than fair market value, the lender will not approve a loan.
Title. If there are liens or other issues with the seller’s title, the sale will not be able to close.
Buyer’s Home Sale. Buyers may include a contingency that if they cannot sell their current house within a specified time period, they can end the contract with the seller.
A house listed as contingent may still be actively shown and the buyer can continue to accept offers if they wish. If any of the requirements do not work out as spelled out in the contract, the buyer is allowed to back out.