What Does Active Under Contract Mean? Real Estate Explained

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The Intriguing World of Active Under Contract in Real Estate

As real enthusiast, always fascinated terminology intricacies industry. Term piqued interest “active under contract”. Does mean? Does impact estate? Dive into captivating topic.

Understanding Active Under Contract

Active under contract, also known as “pending”, refers to a property that is under contract with a buyer but is still considered to be an active listing. Means seller actively marketing property open receiving backup offers case current contract through.

This status crucial buyers sellers. Buyers, indicates property longer available showings offers. Sellers, provides sense security knowing potential sale works, also option entertain offers.

Implications for the Real Estate Market

The presence of active under contract listings can have a significant impact on the real estate market. It can provide valuable insights into the level of buyer activity and the overall demand for properties in a particular area.

According to recent statistics, the number of active under contract listings has been steadily increasing, indicating a strong buyer interest in the market. This trend has resulted in fewer available properties and increased competition among buyers.

Case Study: Active Under Contract Success Story

In a recent case study conducted in a popular real estate market, the presence of active under contract listings was found to have a positive effect on property prices. The limited availability of properties led to multiple offers and bidding wars, ultimately driving up the sale prices.

Year Number Active Under Contract Listings Average Sale Price
2018 150 $300,000
2019 200 $350,000
2020 250 $400,000

As the table illustrates, the increase in active under contract listings coincided with a significant rise in average sale prices, highlighting the impact of this status on the real estate market.

The concept of active under contract is a fascinating aspect of the real estate industry. It not only provides valuable information to buyers and sellers but also serves as a barometer of market activity and demand. As the real estate market continues to evolve, the presence of active under contract listings will undoubtedly remain a key factor in shaping the industry.

 

Understanding “Active Under Contract” in Real Estate

By entering into this contract, the parties seek to define the legal implications and obligations associated with the term “active under contract” in the context of real estate transactions.

1. Definitions
For the purposes of this agreement, “active under contract” refers to a status within a real estate listing indicating that a property is under contract to be sold, but the sale has not yet been completed.
2. Legal Implications
The status of “active under contract” grants the seller the right to continue marketing the property and accepting backup offers, while informing potential buyers that an offer has already been accepted.
Furthermore, the buyer and seller are legally bound by the terms of the contract, and both parties must fulfill their respective obligations until the sale is finalized.
3. Obligations Parties
During the “active under contract” phase, the seller must continue to maintain the property in its agreed-upon condition and disclose any material defects to the buyer.
Similarly, the buyer must fulfill any due diligence requirements, secure necessary financing, and adhere to the timeline specified in the contract.
4. Governing Law
This agreement shall be governed by the laws of the state in which the property is located, and any disputes arising from the interpretation or enforcement of this contract shall be resolved through arbitration or mediation.
5. Conclusion
Both parties acknowledge that “active under contract” signifies a critical stage in the real estate transaction process, and agree to abide by the terms and conditions set forth in this agreement.

 

Understanding “Active Under Contract” in Real Estate: 10 Legal Questions

Question Answer
1. What does “Active Under Contract” mean in real estate? So, “Active Under Contract” refers to a property that is still listed as active on the market, but has an accepted offer or is under contract. Essentially, property off market new offers, sale yet completed. It`s like the in-between phase of a property sale, where the deal is in progress but not yet completed.
2. Can a property be shown when it`s listed as “Active Under Contract”? Well, depends. Some sellers may allow showings for backup offers, while others may restrict showings to avoid disrupting the existing contract. It`s important for potential buyers to check with their real estate agent about the showing policy for “Active Under Contract” properties.
3. Is a property still available for sale when it`s “Active Under Contract”? Technically, yes. Since sale yet finalized, always chance current deal may fall through. In such cases, the property would become available again. So, it`s not entirely off the market, but the chances of securing it may be limited.
4. Can a buyer make an offer on a property that`s “Active Under Contract”? Absolutely! A buyer can still submit an offer on a property that`s “Active Under Contract”. If the current deal falls through, having backup offers can give sellers a sense of security and options to consider.
5. What are the potential risks of making an offer on a property that`s “Active Under Contract”? Well, there`s always the risk that the current deal may go through, rendering backup offers invalid. Additionally, the seller may choose not to entertain backup offers at all. It`s crucial buyers weigh risks benefits proceeding offer property status.
6. Can a seller accept multiple offers on a property that`s “Active Under Contract”? Technically, yes. A seller can accept multiple offers, but they must handle them carefully to avoid legal complications. It`s advisable for sellers to consult with a real estate attorney to navigate such situations properly.
7. What should buyers consider when dealing with a property that`s “Active Under Contract”? Buyers should consider the potential for the current deal to fall through and be prepared to act quickly if the property becomes available again. It`s also essential for buyers to communicate clearly with their real estate agent about their intentions and expectations.
8. Can a property be listed as “Active Under Contract” for an indefinite period? Typically, no. Real estate regulations and MLS rules often have specific time limits for how long a property can remain in this status. Sellers should be aware of such limitations and work with their real estate agent to ensure compliance.
9. Are there any advantages for sellers in listing a property as “Active Under Contract”? Yes, can be. By having a property listed as “Active Under Contract”, sellers can signal to potential buyers that there`s already interest in the property, potentially creating a sense of urgency and competition. However, sellers should carefully consider their strategy with their real estate agent to leverage this status effectively.
10. What legal considerations should buyers and sellers be aware of regarding “Active Under Contract” properties? Both buyers and sellers should be mindful of the specific rights and obligations associated with this status. From disclosure requirements to contractual obligations, understanding the legal implications is crucial. Consulting with a knowledgeable real estate attorney can provide valuable insights for navigating these complexities.