What Does Under Contract Mean in Texas Real Estate?

You find the house. You are ready to make an offer. Then you see it: Under Contract. Here is what that actually means in Texas — and whether the home is truly off the table.

What Does Under Contract Mean in Texas?

When a Texas home is listed as under contract, it means the seller has accepted a buyer's offer and both parties have signed a purchase agreement — typically the TREC One to Four Family Residential Contract for residential resale transactions. The home is now in an active transaction, but it has not yet closed. The listing may still appear on the MLS during this period, sometimes marked as "Under Contract" or "Option Pending," which tells other buyers and agents the current status without removing the home from the active database entirely.

Option Pending vs. Under Contract: What Is the Difference?

In Texas, you will often see two distinct statuses that both mean a contract is in place:

• Option Pending: The buyer is still within their option period — the negotiated window during which they can terminate the contract for any reason and receive their earnest money back. During this phase, the transaction can still fall through if the buyer exercises their right to terminate. The option period typically runs three to ten calendar days from the effective date of the contract.
• Under Contract (post-option): The option period has expired and the transaction is more firmly committed. The buyer's earnest money is now at risk if they back out without a valid contractual contingency such as a financing denial or title defect. The transaction is much more likely to close at this stage.

Can You Still Make an Offer on an Under Contract Home?

Yes — in Texas, sellers can accept a backup offer even while under contract with another buyer. A backup contract goes into effect only if the primary contract falls through. The TREC Addendum for Back-Up Contract governs this arrangement. Backup contracts are particularly worth pursuing when a home is still in its option period, since a meaningful percentage of option-period transactions do terminate — especially if inspection issues arise or buyer financing does not come together. Your agent can inquire about the current status of the transaction and whether the seller is accepting backups.

What Happens Between Under Contract and Closing?

Once a Texas home goes under contract, the following steps typically occur before closing:

• The buyer delivers earnest money and the option fee to the title company, typically within one to three business days of the effective date.
• The buyer completes inspections during the option period and negotiates any repairs, credits, or price adjustments.
• The lender orders an appraisal and begins formal loan underwriting.
• The title company conducts the title search and prepares the title commitment.
• Both parties work toward satisfying any remaining contract conditions before the scheduled closing date.
• At closing, the buyer signs approximately 30 to 50 documents, wires the cash to close, and receives the keys. In Texas, wet funding means the deed is recorded and keys are handed over on closing day.

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