What does it mean when a property is described as "under contract"?

When a property is described as "under contract," it signifies that the seller has accepted an offer, and the terms of the sale are in the process of being finalized. At this stage, both the buyer and seller are engaged in negotiating the details of the agreement, which may include clauses related to inspections, financing, and other contingencies that must be met for the sale to proceed.

This situation indicates a commitment from both parties, although it does not yet mark the completion of the transaction. While the property may still be technically on the market until all contingencies are satisfied, the owner has generally paused accepting new offers in light of the existing agreement.

Understanding this terminology is critical in real estate as it helps clarify the status of the transaction and what actions potential buyers can take if they're interested in the property. It is essential to recognize that the contract does not guarantee a sale until all terms are met and the transaction is finalized.