The process of buying or selling a home can be both exciting and overwhelming. With so many terms and stages involved, it’s easy to feel unsure about what certain phrases mean—especially if you’re new to real estate. One such commonly misunderstood phrase is “under offer.”
If you’ve been browsing property listings, chances are you’ve come across this term. But what does “under offer” mean on a house sale, and why is it important? Understanding this status is crucial for both buyers and sellers, as it typically marks a significant milestone in property transactions.
Definition of “Under Offer” in House Sales
What Does “Under Offer” Mean?
In real estate, the term “under offer” signifies that a seller has accepted an offer from a buyer, but the sale has not yet been finalized. It’s essentially the first step in removing the property from the market, although there are still conditions and legalities to address before the deal is officially closed.
“Under Offer” vs. “Sold Subject to Contract” vs. “Sold”
While these terms are often used interchangeably, they have distinct meanings:
- Under Offer: The seller has accepted an offer; however, the sale is not yet legally binding.
- Sold Subject to Contract (SSTC): Similar to “under offer,” but highlights that the offer is conditional upon contracts being exchanged.
- Sold: The property sale has been legally completed, with contracts exchanged and ownership transferred.
This distinction is important because “under offer” does not guarantee the property will be sold. There are still hurdles to overcome before the sale moves forward.
Why Understanding “Under Offer” Matters
Whether you’re a buyer or seller, knowing what “under offer” means can help you set realistic expectations during this stage of the process. It’s a temporary status that indicates progress but not certainty.
Conditions and Contingencies During the “Under Offer” Stage
Common Conditions for a Property to Be Sold
After an offer is accepted, there are usually specific conditions or contingencies that must be met before the sale can proceed. These might include:
- Mortgage Approval: The buyer must secure financing for the property.
- Property Inspections: Surveys, pest inspections, and structural assessments may be required.
- Legal Checks: Both parties must conduct due diligence on the property to ensure there are no outstanding legal disputes or issues.
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The Due Diligence Period
The due diligence period is critical for buyers. During this time, buyers review all aspects of the property to ensure that they are making an informed decision. If any red flags arise—such as structural issues or financing challenges—they may decide to withdraw their offer.
How These Conditions Affect the Process
The “under offer’ stage serves as a buffer, allowing both parties to ensure everything is in order. Buyers should use this time to:
- Finalize their mortgage application.
- Arrange for necessary inspections and surveys.
- Work with solicitors or conveyancers to review contracts.
For sellers, this stage is an opportunity to address any concerns raised by the buyer.
What “Under Offer” Means for Buyers and Sellers
For Buyers: Rights and Responsibilities
As a buyer, the “under offer” stage allows you to:
- Conduct property inspections and surveys.
- Withdraw your offer if significant issues arise.
- Negotiate based on findings during due diligence.
However, it’s important to note that an accepted offer does not guarantee exclusivity until contracts are exchanged. Sellers may still entertain backup offers.
For Sellers: Implications of Accepting an Offer
Sellers benefit from having a property “under offer” because it signals interest and progress. However, they should:
- Be prepared for buyers to renegotiate.
- Consider backup offers in case the deal falls through.
- Communicate clearly with their estate agent about the status of the sale.
The Role of Estate Agents
During this phase, estate agents act as intermediaries, managing communication between buyers and sellers. They also play a key role in marketing the property, even while it’s under offer.
Impact of “Under Offer” Status on Property Marketing and Negotiations
Does the Property Stay on the Market?
When a property is “under offer,” it may or may not remain visible to other potential buyers. Some sellers decide to keep the listing active until contracts are exchanged, while others temporarily withdraw it.
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Creating Urgency Among Buyers
The “under offer” status can create a sense of urgency for other buyers. Knowing that the property is attracting offers might prompt them to act quickly, potentially leading to the following:
- Increased interest in the property.
- Multiple offers or bidding wars among buyers.
Balancing Negotiations
For sellers, this stage presents an opportunity to capitalise on interest in the property. Buyers, on the other hand, should remain cautious and avoid overpaying in competitive situations.
Legal and Contractual Aspects of Being “Under Offer”
No Legal Contract Yet
It’s crucial to understand that “under offer” is not a legally binding status. Until contracts are exchanged, either party can withdraw from the deal. This uncertainty can be stressful but is an inherent part of the process.
Steps After Conditions Are Met
Once all contingencies are satisfied, the next steps include:
- Exchange of Contracts: This is when the sale becomes legally binding.
- Completion: The final transfer of ownership occurs.
Risks During the “Under Offer” Phase
The deal can fall through for various reasons, including:
- The buyer failed to secure financing.
- Issues discovered during inspections.
- A higher competing offer from another buyer.
Common Misconceptions About “Under Offer” in House Sales
“Under Offer” Guarantees a Sale
One common misunderstanding is that “under offer” means the sale is guaranteed. In reality, there is still a significant chance that the deal may not go through.
Buyers Can’t Make Offers on “Under Offer” Properties
Another myth is that once a property is “under offer,” no further offers are accepted. While this depends on the seller and their agent, it’s often possible for other buyers to submit backup offers.
“Under Offer” vs. “Sold Subject to Contract”
These terms are similar but not identical, as discussed earlier. It’s important to understand their differences to avoid confusion.
Tips for Buyers and Sellers When a Property is “Under Offer”
For Buyers: Stay Proactive
- Get Pre-Approved: Ensure your financing is in place.
- Complete Inspections Promptly: Address any issues quickly to avoid delays.
- Communicate Clearly: Stay in regular contact with your agent and solicitor.
For Sellers: Manage Offers Wisely
- Be Transparent: Keep all parties informed about the sale’s status.
- Consider Backup Offers: Have a plan in case the deal falls through.
- Work with Your Agent: Use their expertise to navigate this phase.
Avoiding Potential Pitfalls
Both buyers and sellers can benefit from being prepared, staying flexible, and maintaining open communication during the “under offer” stage.
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