It’s happened to everyone during a home search.  You are scrolling through homes when suddenly one that you haven’t noticed before seems like the perfect home for you.  The price is within your budget.  The floorplan is great.  You excitedly call your REALTOR® to scheduling a showing, but you find out that the home is considered active under contract.  Most buyers feel really disappointed because they feel as if they missed out on the home, but is there a possibility that you didn’t?  Can you make an offer on a home that is active under contract?

What does active under contract mean?

When homes are listed on the MLS (the multiple listing service) they are considered active.  These are properties on the market that are currently available.  When a seller accepts an offer from a buyer and the home is currently going through the clearing contingencies time period, it is often changed from active to active under contract on the MLS.  

Clearing the contingencies means that the buyers are conducting a home inspection and any other inspections (water quality, septic, pest, radon) that are in the contract, finalizing their mortgage documents, and negotiating with the sellers on any repairs.  Once all the contingencies have been cleared, the home is considered pending.

It is important to note that third party websites may not use the same language as the MLS.  For example, active under contract may be a synonym for contingent on these sites.  Talk to your REALTOR® for any clarification. 

Can I still see a home that is active under contract?

Your REALTOR® will have to speak with the seller’s agent to see if the seller is open to allowing other potential buyers to see the property while it is active under contract.  Many sellers may feel uncomfortable doing this because they are already in an agreement with buyers.

Sometimes, sellers might have a kick-out clause in their agreement.  This means that they have given the buyers a limited amount of time to complete conditions in order to be able to purchase the home.  For example, maybe the buyers need to sell their home in another state before they can purchase the new one.  The sellers may agree to give the buyers fifteen days to get their original home under contract with the stipulation that if another offer comes in during that time period, the sellers can exit the current contract and pursue another.

Can I make an offer on a home that is active under contract?

If you really like a home that is active under contract, you can make an offer, but it is considered a backup offer.  The sellers are already in a contract with the current buyers and they cannot break the contract just because you offer more than list price or your offer seems more appealing.

Sometimes things don’t work out in real estate.  An unexpected job change can lead to a buyer’s inability to secure a mortgage.  A home inspection that reveals an issue bigger than what the buyer wants to take on can cause them to exit the contract.  In these cases, putting in a backup offer means that you will be one of the first considered when the home returns to the market.

Why don’t buyers put in backup offers?

The main reason that most buyers won’t write a backup offer is time.  Buyers have no way of knowing whether the first offer will go through so they risk spending time on a home that they may never be able to purchase.  Many buyers who find out a home is active under contract choose to move on to another property because their timelines don’t allow them to wait.