What does the term "under contract" signify in real estate?

The term "under contract" in real estate signifies that an agreement exists between the buyer and seller, indicating that they have accepted the terms of the sale, but the transaction has not yet closed. This status means that both parties are legally bound to the contract, and the buyer typically begins to prepare for finalizing the purchase through processes like securing financing and conducting inspections.

This stage is crucial in the real estate transaction process because it indicates a commitment from both sides to move forward. Additional steps, such as title searches and appraisals, often occur before reaching the closing stage, where the actual transfer of ownership takes place.

The other options provided do not accurately capture the definition of "under contract." For instance, stating that the property has been sold and is pending closure describes a stage that occurs after the "under contract" phase. Similarly, saying that the seller has accepted an offer but has not signed any documents suggests an informal agreement, which does not reflect the binding nature of an "under contract" status, as the contract typically involves at least a signed agreement or mutual consent on the terms. Lastly, a verbal agreement does not constitute being "under contract," as valid real estate contracts generally require written documentation to be enforceable.