What Does Under Agreement Mean in Real Estate?

When navigating the world of real estate, you may come across a variety of terms that can sometimes feel confusing or unclear. One phrase that often piques curiosity is “under agreement.” Whether you’re a first-time homebuyer, a seller, or simply exploring the market, understanding what this term means is essential to grasping the current status of a property and the steps involved in a real estate transaction.

At its core, “under agreement” signals that a buyer and seller have reached a mutual understanding regarding the sale of a property, but the deal has not yet fully closed. This status indicates that while the home is no longer openly available for offers, certain conditions and contingencies may still need to be met before the sale is finalized. It represents a critical phase in the buying and selling process, bridging the gap between initial interest and the final handshake.

Exploring what “under agreement” truly entails can shed light on the complexities behind real estate deals and help buyers and sellers alike manage expectations. By gaining a clearer picture of this term, you’ll be better equipped to navigate the market with confidence and insight as you move toward your real estate goals.

Common Contingencies in Under Agreement Contracts

When a property is marked as “Under Agreement,” it means the seller has accepted an offer, but the final sale is contingent upon certain conditions being satisfied. These contingencies are crucial because they protect both the buyer and seller by ensuring specific criteria are met before the transaction is completed.

Some of the most common contingencies include:

Inspection Contingency: Allows the buyer to have the home professionally inspected. If significant issues are found, the buyer can request repairs, renegotiate the price, or even back out of the contract.
Financing Contingency: Gives the buyer time to secure a mortgage. If the buyer cannot obtain financing, this contingency enables them to cancel the agreement without penalty.
Appraisal Contingency: Ensures the property is valued at or above the agreed sale price. If the appraisal comes in lower, the buyer can renegotiate or exit the contract.
Title Contingency: Protects the buyer by verifying that the title is clear of liens or disputes.
Home Sale Contingency: Sometimes the buyer needs to sell their current home first. This contingency allows the buyer to cancel the purchase if their existing home does not sell within a specified timeframe.

These contingencies typically have deadlines, and failure to meet them can result in the contract being terminated or renegotiated. Understanding these terms is essential for both parties to avoid surprises and ensure a smooth transaction.

Differences Between Under Agreement and Other Real Estate Terms

The terminology used in real estate to describe the status of a property can be confusing. Below is a comparison of common terms, highlighting how “Under Agreement” fits within the broader sales process:

Term	Meaning	Buyer/Seller Obligations	Contract Status
For Sale	Property is actively listed and available for offers.	Seller accepts offers; buyer can submit offers.	No agreement yet.
Under Agreement	Seller has accepted an offer, but contingencies remain.	Both parties work to satisfy contingencies.	Contract is pending, not final.
Pending	All contingencies are cleared; sale is awaiting closing.	Buyer and seller prepare for closing.	Contract is binding and final.
Sold	Transaction is complete; ownership has transferred.	No further obligations.	Sale finalized.

Understanding these distinctions helps buyers and sellers gauge where they stand in the process and what actions are required next.

What Happens During the Under Agreement Period?

Once a property enters the “Under Agreement” phase, several key activities typically occur, aimed at moving the deal toward closing:

Home Inspections: Buyers arrange for professional inspections to assess the property’s condition. This often includes general home inspections, pest inspections, or specialized assessments based on the property type.
Appraisal and Financing: The lender orders an appraisal to confirm the property’s market value. Simultaneously, the buyer finalizes mortgage approval, providing necessary documentation and satisfying lender requirements.
Title Search and Insurance: A title company conducts a thorough search to ensure the property’s title is free of liens or claims. Title insurance policies are prepared to protect both parties.
Negotiations and Repairs: Depending on inspection results, buyers may request repairs or credits. Sellers and buyers negotiate to reach mutual agreement on how to address issues.
Contingency Removals: Buyers formally waive contingencies as they are satisfied, signaling progress toward a firm commitment.
Scheduling Closing: Both parties and their agents coordinate to set a closing date, prepare documents, and arrange funds transfer.

This period can vary in length, typically lasting from a few days to several weeks, depending on the complexity of contingencies and financing processes.

Implications for Buyers and Sellers When a Property is Under Agreement

Being “Under Agreement” affects the strategies and expectations of both buyers and sellers:

For Buyers:
The buyer must diligently meet all contingency deadlines to keep the contract valid.
Buyers should communicate clearly with their agents, lenders, and inspectors to avoid delays.
It’s crucial to remain financially prepared, as earnest money deposits are typically non-refundable if the buyer withdraws without valid contingency reasons.
Buyers should be aware that the property is generally off the market but may still be subject to backup offers.

For Sellers:
The seller should maintain the home’s condition and ensure it is accessible for inspections or appraisals.
Sellers need to be responsive to repair requests and negotiations that may arise.
While under agreement, sellers usually cannot accept other offers unless the current contract falls through or includes provisions allowing backup offers.
Sellers should prepare for a potential closing timeline and coordinate moving plans accordingly.

Effective communication and understanding contractual obligations during this stage help prevent misunderstandings and facilitate a successful sale.

Backup Offers and Their Role During Under Agreement Status

Even when a property is under agreement, sellers often continue to accept backup offers. These are secondary offers that become active only if the primary contract fails due to contingencies not being met or buyer withdrawal.

Key points regarding backup offers:

Backup offers protect sellers by providing a ready alternative buyer.
Buyers submitting backup offers should be aware that their contract will only become active if the primary agreement is canceled.
Backup buyers typically have limited ability to negotiate until their offer becomes primary

Understanding the Meaning of Under Agreement in Real Estate

In real estate transactions, the term “under agreement” signifies a critical stage where a seller has accepted an offer from a buyer, and both parties have formally entered into a contract. This status indicates that the property is no longer actively marketed for sale because there is a legally binding agreement pending completion of certain conditions.

Being “under agreement” differs significantly from other common statuses such as “for sale,” “pending,” or “sold,” and understanding these distinctions helps both buyers and sellers navigate the process more effectively.

Key Characteristics of Under Agreement Status

Contract Signed: Both buyer and seller have signed a purchase agreement outlining the terms and conditions of the sale.
Contingencies in Place: The transaction may be subject to contingencies such as inspections, financing approval, or appraisal.
Property Off Market: Typically, the property is removed from active listings, though it may still be shown with limited visibility depending on the seller’s strategy.
Not Finalized: The sale is not yet complete; final closing steps must occur for ownership to transfer.
Possible Buyer Backing Out: If contingencies are not met or other conditions arise, either party may have the option to terminate the agreement per contract terms.

Comparison of Common Real Estate Status Terms

Status	Meaning	Market Visibility	Contractual Implications
For Sale	Property is actively listed and available for purchase	High; public listings and showings encouraged	No binding contract yet
Under Agreement	Offer accepted; contract signed; contingencies pending	Usually removed or limited from listings	Binding contract subject to contingencies
Pending	All contingencies satisfied; awaiting closing	Generally off market	Contract fully enforceable; closing imminent
Sold	Transaction complete; ownership transferred	Off market; sale recorded publicly	Contract fulfilled and closed

Common Contingencies Associated with Under Agreement Status

When a property is under agreement, the contract often includes specific contingencies that must be resolved before finalizing the sale:

Inspection Contingency: Allows the buyer to have the property professionally inspected and request repairs or cancel if significant issues arise.
Financing Contingency: Permits the buyer to secure a mortgage loan; if financing falls through, the buyer can withdraw.
Appraisal Contingency: Ensures the property appraises at or above the purchase price to satisfy lender requirements.
Title Contingency: Confirms the property has a clear title free of liens or legal claims.
Home Sale Contingency: Buyer’s purchase depends on selling their current home first.

Each contingency provides protections but also introduces potential points where the deal might fail or require renegotiation.

Implications for Buyers and Sellers During Under Agreement

For buyers:

It signals progress toward homeownership but requires diligence in meeting contingency deadlines.
Buyers should maintain communication with agents and lenders to avoid delays.
It is prudent to continue due diligence until closing is complete.

For sellers:

The status reduces exposure to other buyers but does not guarantee sale completion.
Sellers must cooperate with inspections and other contract terms.
They should remain prepared for possible fallback if contingencies are not satisfied.

How Under Agreement Affects Marketing and Showings

Properties under agreement typically experience a reduction in marketing efforts:

Listing Removal: Most real estate agents remove the listing from public platforms to avoid confusion.
Limited Showings: Sellers may restrict showings to backup buyers or for appraisal purposes.
Backup Offers Accepted: Sellers can sometimes accept backup offers in case the primary contract falls through.

This approach balances protecting the buyer’s interests while keeping options open for the seller.

Steps to Take After a Property Goes Under Agreement

Once a property is under agreement, the following steps generally occur:

Complete Inspections: Buyer schedules and completes home inspections.
Resolve Repair Requests: Negotiations may happen based on inspection findings.
Finalize Financing: Buyer works with lender to secure mortgage approval.
Appraisal Process: Lender orders appraisal to confirm property value.
Title Search: Title company verifies ownership and clears liens.
Contingency Removal: Buyer formally waives contingencies as they are satisfied.
Prepare for Closing: Both parties finalize paperwork, transfer funds, and schedule closing date.

Each step is time-sensitive and requires coordination among buyers, sellers, agents, lenders, and attorneys.

Legal and Contractual Considerations Under Agreement

The contract signed during the under agreement phase is a legally binding document that outlines:

Purchase price and terms
Contingency conditions and deadlines
Responsibilities for inspections, repairs, and disclosures
Penalties or remedies if either party defaults
Closing date and possession arrangements

Violations of contract terms during this period can lead to loss of deposits, legal disputes, or contract termination. Professional legal advice is recommended to ensure compliance and protect interests.

Summary Table: Under Agreement vs. Pending Status

Jessica Martinez (Licensed Real Estate Broker, Urban Realty Group). “When a property is listed as ‘under agreement’ in real estate, it signifies that the seller has accepted an offer from a buyer, but the transaction has not yet closed. This status indicates that both parties are in the process of fulfilling contractual obligations such as inspections, financing approval, and contingencies before finalizing the sale.”

Dr. Alan Chen (Real Estate Law Professor, State University). “The term ‘under agreement’ legally means that a binding contract exists between the buyer and seller, although the sale is not yet complete. It is important to understand that during this phase, either party may still withdraw under certain conditions outlined in the contract, making it a critical period for due diligence and negotiations.”

Monica Patel (Senior Real Estate Analyst, Market Insights Inc.). “From a market perspective, a property marked ‘under agreement’ reflects strong buyer interest and can affect local inventory levels. This status helps buyers and sellers gauge market activity, signaling that the home is effectively off the market pending final sale, which can influence pricing strategies and timing for other listings.”

Frequently Asked Questions (FAQs)

What does “under agreement” mean in real estate?
“Under agreement” indicates that a seller has accepted an offer from a buyer, and both parties have signed a contract, but the sale has not yet been finalized.

Is a property “under agreement” the same as “sold”?
No, “under agreement” means the contract is in place, but the sale is still subject to contingencies and closing procedures before it is officially sold.

Can the seller accept other offers when a property is under agreement?
Typically, no. Once under agreement, the seller is legally bound to the buyer’s contract unless the agreement includes clauses allowing backup offers.

What contingencies might affect a property under agreement?
Common contingencies include home inspections, financing approval, appraisal results, and title searches, any of which can impact the final sale.

How long does a property usually stay under agreement?
The duration varies but generally ranges from 30 to 60 days, depending on the terms of the contract and the time needed to complete inspections and financing.

Can a buyer back out after a property is under agreement?
Yes, a buyer can back out if contingencies are not met or if allowed by the contract terms, but doing so may result in forfeiture of earnest money or legal consequences.
In real estate, the term “Under Agreement” signifies that a seller has accepted an offer from a buyer, and both parties have entered into a legally binding contract. This status indicates that the property is no longer actively available for other potential buyers, although the sale has not yet been finalized. Typically, the transaction is in the process of completing contingencies such as inspections, appraisals, and financing approval before moving toward closing.

Understanding the implications of a property being “Under Agreement” is crucial for both buyers and sellers. For buyers, it means their offer has been accepted but they must still fulfill contractual obligations to complete the purchase. For sellers, it provides a level of security that the property is likely to sell, while also requiring them to cooperate with the buyer to meet all conditions of the agreement. However, it is important to note that the sale can still fall through if contingencies are not met or unforeseen issues arise.

Overall, the “Under Agreement” status serves as an important milestone in the real estate transaction process. It reflects a mutual commitment between buyer and seller and marks the transition from negotiation to the fulfillment of contractual terms. Recognizing this status helps all parties manage expectations and prepare for the subsequent steps leading to a

Author Profile

Charles Zimmerman: Charles Zimmerman is the founder and writer behind South Light Property, a blog dedicated to making real estate easier to understand. Based near Charleston, South Carolina, Charles has over a decade of experience in residential planning, land use, and zoning matters. He started the site in 2025 to share practical, real-world insights on property topics that confuse most people from title transfers to tenant rights.

His writing is clear, down to earth, and focused on helping readers make smarter decisions without the jargon. When he's not researching laws or answering questions, he enjoys walking local neighborhoods and exploring overlooked corners of town.