How Long Can A House Be Under Contract?

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“How Long Can A House Be Under Contract? Buying a home may involve finding properties “under contract” on a real estate listing. A house under contract indicates that the seller has accepted an offer, but the buyer still needs to complete the transaction. This stage occurs as soon as both parties have agreed on a price and signed a formal agreement but before the closing.”

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How Long Can A House Be Under Contract?

During this period, you must meet contingencies before officially closing the sale. A property under contract usually goes into “contingent status” and then moves to “pending status.”

The meaning of these listing statuses differs slightly, which we will explore in the next section. In addition, a third listing status is “Active under contract,” which signifies that the seller will consider a backup offer. If you find the correct home listing, you might envision living there. But before imagining furniture placement, have you ensured the listing is still active?

The listing may state “under contract” or “pending,” which can be discouraging if you hope to own the property. There is no difference between “under contract,” “in contract,” and “under agreement.” Each means the same thing, and these terms often appear interchangeably.

Is it still possible to make an offer on a house in this state? Even though they have signed the agreement, the sale may not go through. At the closing table, the parties exchange papers and close the transaction.


Under Contract: What Does It Mean?

Under contract is a written agreement for the sale of property that you sign with the seller. The contract outlines the conditions and terms that govern the transaction. When you sign a deal, you must fulfill the terms of the real estate contract. It covers the agreed-upon price, closing costs, and any additional conditions or contingencies.

Keep in mind that a breach of agreements can result in serious legal ramifications. So, it’s crucial to read the conditions and terms thoroughly.

Let’s examine the process of selling a home to understand better what a house under contract means.


Sellers decide to sell their homes.

When deciding to list their house for sale, it is the homeowner’s responsibility to contact a real estate agent. During the listing process, the agent will research the property and neighborhood to advise the seller of the best price to list the home.

A seller can authorize a real estate agent to market their residence if they approve the listing price and the listing agreement. Among the tactics the real estate agent may use in their marketing plan are:

  • Investing in a professional photographer
  • Copywriting for listing listings
  • Designing full-color marketing brochures
  • Adding a listing to the multiple listing service
  • Opening the doors to the public
  • Virtual walkthroughs
  • Virtual open houses
  • Messages on social media
  • Efforts to promote real estate to other agents


House Under-Contract Procedures

A buyer has made an offer to the seller for the house. The real estate agent successfully marketed the house with the help of the buyer’s agent, and a buyer was found. The buyer’s agent submits a written offer to the seller’s representative in the following step.


The offer price of the buyer

This is the most essential part of the letter for sellers, as the buyer’s price must be clearly stated. Buyers must work with their agent to find an acceptable price. There is more competition in a seller’s market, which will result in higher offers. Buyers need to make strong offers to secure their desired house.

It can be challenging to compete against bidding wars and cash buyers. When sellers find selling their property challenging, offers will naturally be lower. In such a market, buyers are more likely to submit and accept lower offers.

Additionally, if the home has been on the market for over a month, the seller might be more willing to lower the price. In a down market, prospective buyers are likelier to submit lowball offers that will insult the seller. This is never a good idea when buying a house.


The earnest money

The offer letter will also include earnest money or a good-faith deposit. The earnest money protects the seller if the buyer walks away from the deal without satisfying a common contingency.

In some cases, earnest money deposits can be as little as $1,000 but are generally between 1% and 5% of the purchase price. The seller’s real estate agent, Title Company, or attorney holds the money in an escrow account.

In a seller’s market, earnest money can rise to 10%. The deposit for a new home usually has to be ten percent.


Costs of closing

Buyers may offer to pay some of the seller’s closing costs. Although the buyer does pay closing costs, they are usually less than the seller’s.

On the one hand, closing costs for buyers can reach 5%, including mortgage arrangement fees, home inspection fees, and more; on the other hand, seller closing costs can get 6%, including agent commissions both for sellers and buyers.

In some cases, the buyer can roll these closing costs into their mortgage. However, if the lender doesn’t offer that option, the buyer must pay these fees separately.


What you need to know about contingencies

Before closing on a home sale, the buyer must agree to a contingency clause allowing him to back out and keep the earnest money in case things do not work out.

In a seller’s market, contingencies are less common but common in an offer letter. Several contingencies could occur, including:


Contingent House Contracts Usually Have One Of These Clauses.


Contingency for a home inspection

The property inspection is one of the most significant hurdles in the real estate. If the buyer can’t reach an agreement on repairs, they can back out of the deal. In the course of the audit, the inspector will analyze the issue within a time frame and then report on their findings.


Contingencies in appraisals

If the appraised value of the home is lower than the price of purchase, buyers can decide to leave the property. Buyers can also find down payment funds to make up the difference between the application and purchase prices by lowering their sale price or their appraisal price.


Contingency for Financing

Buyers pre-approved for a mortgage may not necessarily receive a mortgage commitment guarantee. This contingency allows the buyer to exit if they do not qualify for the mortgage they want.

When it comes to financing, cash offers can be an appealing option. However, financing issues are not expected. The odds increase when a buyer has a minimum credit score or a debt-to-income ratio that is close to the property debt-to-income ratio.


Contingencies for home sales

When a buyer wants to make their current home a contingency, the sale is only permitted if the seller sells it. In most cases, sellers’ agents will advise against accepting contingent contracts as they are precarious. A contingent sale often results in a void transaction.


Contingency for clear title

Almost all real estate contracts provide for an apparent title contingency, and title searches ensure this. Different terms may apply, or the sale price may be lowered depending on the contingencies.


Under Contract Duration: How long can a house be under contract?

While the under-contract period can vary, it usually lasts between 30 and 60 days. However, several factors can influence its duration, such as contingencies, negotiations, and local regulations. In some states, for example, mandatory waiting periods or disclosures can shorten the under-contract period.


Under Contract Duration: How long can a house be under contract?


Moreover, the length of the under-contract period can also be affected by the type of financing used, such as an FHA or VA loan. Sellers and buyers must know the expected length of the under-contract term and share any concerns or problems with their real estate agent.


Here Are Some Reasons Why Signing A House Contract Can Take Longer Than Expected.

While most of us hope for a smooth and swift house sale or purchase, there are instances when the process takes longer than expected. While this can be frustrating, it’s essential to understand that there are several underlying factors.


The financing process.

There are many reasons why a house contract is extended. For example, a lender may discover discrepancies in a buyer’s credit history during the underwriting process, resulting in the extension of the house contract.

As a result of this unexpected issue, additional documentation and clarification are required, resulting in a delay in obtaining final approval of the loan.


Inspections of homes.

The buyer usually hires a professional home inspector to assess the property’s condition during the due diligence, which may also lead to an extended house contract.

If the inspector discovers significant issues, such as structural defects or plumbing problems, the buyer can request repairs or negotiate further concessions from the seller. Both parties will engage in back-and-forth negotiations to reach a mutually acceptable resolution.


Considerations of law.

Legal considerations may also influence the length of a house contract. For example, if there are unresolved title issues, such as liens or property boundary disputes, it may take time to settle them before the contract can be finalized.


Tips for Sellers to Shorten the Duration of a House under Contract.

How long can a house be under contract? There are specific actions sellers can take to accelerate the sale of their home. The following tips will help you streamline the process and get your house off the market as quickly as possible:


Don’t overprice.

Conduct market research and consult your agent. It is possible to sell your home faster if you set a realistic price. Overpriced properties deter buyers, so a realistic price can help you attract more interest and sell the house faster.


Improve curb appeal.

The exterior of your house is the first thing potential buyers will notice. Ensure the landscape is well-maintained, the front door appears correctly, and the overall curb appeal is excellent.


Strategically plan the stage.

Make your home look its best to capture the attention of potential buyers. Stage your home to display its best features and create a welcoming atmosphere. Remove unnecessary belongings and clutter to let potential buyers envision themselves living in the house.


A flexible showing schedule is a good idea.

You should accommodate as many showing requests as possible to maximize exposure. Buyers have busy schedules, so you should be flexible to help ensure your property gets noticed by as many buyers as possible. Ensure that your house is always clean and show-ready.


Be prompt in your response.

Timely communication is essential in the negotiation and inspection process. Respond quickly to buyer’s agent inquiries and provide the necessary documents and information when requested. Being proactive and responsive is essential for building trust and keeping the transaction moving forward.

When sellers follow these tips, they can reduce the time it takes to sell their home by pricing it right, improving curb appeal, being flexible with showings, and getting back to buyers promptly.


What happens when the Under Contract Period expires?


Buyers’ options

Suppose the under-contract period ends without a closed sale. In that case, a buyer can access several options, including extending the under-contract period if both parties agree or terminating the agreement and seeking other options.


The seller’s options

If sellers are unable to close on the property during the under-contract period, they have several options. They can relist the property, negotiate a new contract with the buyer, or remove it from the market in its entirety.


Possible Consequences

Either party can terminate the contract if they fail to fulfill their obligations during the under-contract period, such as if the seller fails to make agreed-upon repairs.

However, the seller can keep the earnest money deposit if the buyer cannot secure financing. Both parties must understand their obligations and communicate effectively to ensure a successful closing.


Under Contract vs. Pending: What’s the Difference?

While looking for a home, you might see the words “contingent,” “under contract,” or “pending.” There are some essential differences between these clauses that, as a buyer, might help you decide whether you should keep an eye on the property if the deal falls through.


Under contract

How long can a house be under contract? If a home listing has any of these statuses, you may still be able to purchase the property since the current buyer and seller are still negotiating the contract terms. If the buyer withdraws from the purchase or the seller refuses to address issues found on the inspection, you can buy the house when it resurfaces on the market.



Depending on whether a house transaction is in progress, a buyer may have submitted an offer with contingencies or agreed to them. Even if the buyer’s mortgage application fails, you’ll need to continue your house search, even if the purchase could fall through.


Is It Possible To Back Out Of A Contract By A Seller?

For a seller to legally end a contract, there are two primary methods:

  • The seller may withdraw from the contract for any reason outlined in the agreement, including contingent liabilities.
  • The seller can terminate the agreement in cases of “failure to perform” or not upholding the buyer’s end of the agreement.


The Bottom Line: How Long Can A House Be Under Contract?

The signing of a contract is an essential step toward purchasing a house — however, it’s not the end of the road. It is necessary to understand how and why specific home deals fall through. Making sure you have an alternate offer can place you in the perfect spot at the right moment to accomplish your goal of purchasing the home of your dreams.


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