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

When a property is described as "under contract," it signifies that there is a legally binding agreement in place between the buyer and seller that outlines the terms of the sale. This means that the buyer has made an offer that the seller has accepted, and both parties are committed to completing the transaction. While the deal has not yet closed—meaning that the property has not yet officially changed ownership—both parties are legally obligated to adhere to the terms of the contract, barring any contingencies that might allow for withdrawal.

This status indicates that the property is no longer actively being marketed, as the seller has agreed to the terms with a specific buyer. It differentiates between properties where negotiations are ongoing, where the seller might still entertain other offers, and properties that are already secured by an accepted offer.