What does active under contract mean in real estate?

Active Under Contract is a California-specific MLS status meaning the seller has accepted an offer but is still actively accepting backup offers and showing the property. The deal has contingencies, and the seller wants insurance in case the primary deal falls through.

If you are searching California listings and see "Active Under Contract," that is the seller telling you: yes, I have a buyer, but I am still open for business. Most other states use "Contingent" or "Under Contract" for the same situation. California made this distinction explicit because the failure rate of contingent deals — 5-10% — makes backups genuinely valuable.

This guide walks through exactly what Active Under Contract means, why California created this status, how to submit a backup offer that actually positions you to win, what other state equivalents look like, and what sellers need to know if they are considering using this status.

The 30-second answer: what active under contract means

When a property is marked "Active Under Contract" on the California MLS, four things are true:

1. The seller accepted a buyer's offer and both parties signed a purchase agreement.
2. The offer has contingencies — typically inspection, financing, and appraisal — that have not yet been satisfied.
3. The seller has chosen to keep the listing "active" instead of marking it "pending," explicitly signaling they will continue showing the home and entertaining backup offers.
4. If the primary buyer's contingencies fail, the seller can move to a backup offer immediately — without re-listing the property or starting a new bidding round.

This is different from "Pending," which means all contingencies have cleared and the deal is moving to closing. Active Under Contract is the in-between phase where the contract exists but the deal isn't locked in yet.

Why California created this status

Before Active Under Contract was added, California MLS systems used "Contingent" — the same label as the rest of the country. The problem: sellers and listing agents found themselves in awkward territory. They had an accepted offer, but they wanted to keep showing the home in case the deal fell through. There was no clean way to signal that to other agents and buyers.

The California Regional MLS introduced "Active Under Contract" in the mid-2010s to fix this. Now sellers have a clean signal: "We have a buyer, but the deal isn't done, and we welcome backups."

This made the California market more efficient. Buyers who would have moved on from a Contingent listing can now confidently submit backup offers, knowing the seller is actively accepting them.

Active Under Contract vs Contingent vs Pending

If you compare to non-California markets, Active Under Contract maps closest to "Contingent — Continue to Show" or "Under Contract — Showing." Functionally it is the same idea: deal accepted, contingencies open, still showing for backups.

Other state equivalents

Different MLS systems use different labels for the same underlying situation. Here is the rough mapping:

• California: Active Under Contract
• Florida: Contingent — Continue to Show
• Texas: Option Pending (during the buyer's short termination option) or Pending — Taking Backup
• New York: Contract Signed — Backup Offers Considered (rarely used in NY, where pending is faster)
• Massachusetts: Under Agreement — Showing
• Most other states: Contingent (with a sub-status like "Show" or "No Show")

Wherever you are searching, the key question to ask your agent is: "Can I still tour this home? Is the seller accepting backup offers?" That cuts through the state-specific terminology.

For buyers: how to handle an active under contract listing

Active Under Contract is the most buyer-friendly version of "the seller already has an offer." Here is the right play.

1. Tour the property — yes, you can still see it

The seller explicitly invited showings. Schedule a tour like any active listing. Treat it as if the primary deal might collapse, because there is a meaningful 5-10% chance it will.

2. Submit a backup offer in writing

Your agent prepares a written backup offer with all the same elements as a normal offer: price, contingencies, earnest money, financing terms. The listing agent presents it to the seller.

The seller can either accept it as a backup (locking you into first position if primary collapses) or reject it (meaning if the primary collapses, the listing returns to Active and other buyers can compete with you).

3. Make the backup offer competitive enough to be accepted as backup

Sellers don't accept every backup. They want one that:

• Has terms at least as good as the primary offer
• Comes from a financially qualified buyer (pre-approval letter included)
• Has reasonable contingencies (no exotic ones like a job-relocation clause)
• Has decent earnest money (1-3% of purchase price)

4. Find out which contingencies are open

Your agent can ask the listing agent which contingencies are still pending on the primary deal. If only the inspection is open (typically 7-14 days), failure rate is lower (around 5-8%). If financing is still open and the buyer is using an aggressive loan program, failure rate is higher (10-15%).

5. Have your pre-approval current

If the primary deal falls through, you need to be ready to move immediately. Pre-approval letters expire — make sure yours is dated within the last 60 days.

For sellers: should you use Active Under Contract?

If you are a California seller with an accepted offer that has open contingencies, the decision to use Active Under Contract vs Pending comes down to risk tolerance.

Use Active Under Contract when:

• The buyer has weaker contingencies (FHA loan, home sale contingency, long inspection windows)
• The market is hot enough that backup offers are likely
• You want maximum insurance against the primary deal collapsing
• You have multiple highly qualified backup buyers from your original offer round

Use Pending instead when:

• The buyer is all-cash or has a very strong financing profile
• You have moved out and don't want to deal with continued showings
• The market is slow and backup offers are unlikely
• You want to signal to the primary buyer that you are fully committed

Brokerages we support typically default to Active Under Contract for the first 14 days, then switch to Pending once the major contingencies clear. Listing marketing tends to produce multiple strong offers, which makes Active Under Contract more useful.

The history: how often do active under contract deals close?

Same rate as Contingent deals nationally — about 90-95% close successfully. The 5-10% that fall through become opportunities for backup offers. This is exactly why the status exists.

If a backup offer is in place when the primary collapses, the seller typically moves to closing on the backup within 2-3 weeks. The seller doesn't need to relist, find a new buyer, or restart the process — they just activate the backup contract.

Common mistakes

1. Buyers assuming Active Under Contract means "sold." It doesn't. Submit a backup.
2. Buyers submitting weak backup offers. Backups compete with the primary deal's terms, not the listing price. Match or beat what the primary offered.
3. Buyers not having pre-approval updated. When a primary deal collapses, the seller wants speed. Be ready in 24 hours.
4. Sellers not considering whether to keep the home in show condition. If you used Active Under Contract specifically to invite backups, the home needs to be tour-ready throughout the contingency period.
5. Sellers accepting backups with bad terms just to have a fallback. A weak backup isn't insurance — it's a worse deal waiting in line.
6. Both parties confusing Active Under Contract with Pending. They are not interchangeable. Pending is much closer to sold.

Common questions about active under contract