Can a House Under Contract Be Sold?

Most sellers are very happy to be "under contract."

Most sellers are very happy to be "under contract."

Once you decide to buy a home, you meet with your real estate agent and complete a purchase and sales contract. After you submit this signed agreement, you have submitted a written offer. When the seller officially accepts your offer, her real estate agent updates the listing to say "sales pending" or "under contract." Now the seller cannot sell the home to someone else unless you or the home cannot meet the contingencies.

Under Contract

To officially accept your written offer, the owner countersigns the purchase agreement. Both of your signatures now make the document a legally enforceable contract. This is where the term "under contract" comes from because both you and the owner must now operate under the terms of the contract. The sales and purchase contract is fully binding. Therefore, the owner cannot change her mind and sell to another buyer.

Back-up Offer

If someone is really interested in buying the house, the owner’s real estate agent can accept a back-up offer. If your purchase contract falls through, then that person would be first in line to buy the house. Being under contract does not prohibit the owner or her agent from continuing to show the property. However, most agents put a “sale pending” or “under contract” sign on top of the “for sale” sign to indicate to everyone that the house will likely soon be sold. This discourages all but the rare few who really want a particular home.

Inspections and Appraisals

Unless you are purchasing an “as is” foreclosed or similar house for cash, your purchase contract contains an inspection period. The inspection period allows you to back out if you find problems during this time that change your decision to buy the house or that the seller refuses to correct. For example, you or your home inspector may discover damaged flooring and termite problems during the inspection period. You could request the seller to treat for termites and repair the floor, or you could void the contract.


The inspection period is an example of a contingency. In general, your purchase agreement will contain several additional contingencies that allow you to back out of buying the house for "cause." Typical contingencies include an appraisal clause that protects you if the house appraises below the offer price or a clear title clause in case the title company finds a title defect that is costly to correct. Another contingency you may include is a financing clause in case you are not able to obtain final loan approval during the allowed time period.

Voiding and Extensions

You can void the contract if any contingencies are not met and get a full release and return of any deposit you provided. The seller cannot void the contract unless you cannot obtain financing. If you cannot close by the date given in the sales contract, you are no longer officially “under contract.” Therefore, if you think you need more time to finalize your financing, request a contract extension.


About the Author

Tiffany C. Wright has been writing since 2007. She is a business owner, interim CEO and author of "Solving the Capital Equation: Financing Solutions for Small Businesses." Wright has helped companies obtain more than $31 million in financing. She holds a master's degree in finance and entrepreneurial management from the Wharton School of the University of Pennsylvania.

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