What does a property “under offer” mean?

Property market terminology can sometimes be confusing, especially for first-time buyers or sellers. One phrase that is not always clear is when a property is said to be “under offer”.

What does “under offer” mean?

The phrase “under offer” means that a buyer has made an offer on a property and the seller is actively considering it as a starting point for further negotiations, but no legally binding contract has been entered into yet. Essentially, it indicates that negotiations are progressing, but the deal is not yet final. This nuance is important, as the property is technically still on the market and other potential buyers could step in with competing offers.

Example:

Let us say a buyer has offered £300,000 for a property listed at £320,000. The seller acknowledges this offer as a starting point for negotiations, marking the property “under offer”. However, nothing is set in stone until contracts are exchanged.

Difference between “under offer” and “sold subject to contract”

A term sometimes confused with “under offer” is “sold subject to contract”. While the two are related, they have different implications and represent different stages in the home buying process.

1. Under Offer:

• Indicates that a buyer has expressed interest by making an offer that the seller is actively considering as a starting point for further negotiations.

• A legally binding exchange of contracts has not yet occurred.

• The property is still technically on the market.

2. Sold Subject to Contract:

• Refers to a situation where the seller has accepted the buyer's offer, but contracts have not yet been exchanged.

• This stage is closer to a sale compared to a property being “under offer”, but still no legal obligation exists for either party until contracts are exchanged.

• Other buyers might still submit offers, but they would need to act quickly as exchange of contracts could occur soon.

Properties marked “under offer” or “sold subject to contract” can both progress to completion, although there is also a chance of things falling through.

What happens after a property is “under offer”?

Once a property is “under offer”, several steps must follow before the sale can be finalised. Both buyers and sellers need to be aware of what happens next to keep the process moving.

Survey:

The seller must accept the offer to move forward. After the seller accepts the offer, the buyer will typically arrange a survey of the property. This is important for assessing the home’s condition, identifying potential issues such as structural problems, damp or subsidence. Depending on the outcome of the survey, the buyer might renegotiate the price or request repairs.

Mortgage Approval:

The buyer will typically need to secure a mortgage after their offer has been accepted. The mortgage lender will instruct an independent valuation of the property. If the lender-instructed valuation turns out to be lower than the offer price, the buyer might need to renegotiate with the seller.

Searches and Legal Work:

The buyer's solicitor will carry out property searches such as planning restrictions or local environmental concerns to ensure that there are no legal issues that could affect the purchase. This is part of a process known as conveyancing, which represents the legal work required to complete the purchase and sale of a property.

Conveyancing can take between 8 to 12 weeks, although the timeframe can vary based on factors such as the time that the local council takes to respond to legal searches.

How long from “under offer” to “sold”?

The time it takes for a property to move from “under offer” to “sold” can also vary depending on factors such as the buyer's financial situation, whether or not there is a chain involved, the time it takes the buyer to get mortgage approval and how long the conveyancing process takes.

Typical timeline:

Depending on market conditions, it can take about one or two months for a home to go “under offer” and around six months to sell a home from the time it is first listed to when the seller hands over the keys to the buyer. Buyers and sellers should be prepared to be patient, especially if unexpected delays arise during searches.

What Should buyers and sellers do when a property is “under offer”? (H2)

Both parties need to stay proactive during the “under offer” period to ensure that the process moves forward smoothly.

Buyers:

1. Arrange a Survey: As soon as the offer is accepted, arrange a property survey to flag any potential issues early.

2. Secure Financing: Get your mortgage approval in place as quickly as possible to avoid delays.

3. Communicate regularly: Keep in regular contact with the estate agent, and your solicitor and lender.

Sellers:

1. Remain Open to Other Offers: While the property is “under offer”, other buyers may express interest. Stay open to this interest, especially if your current buyer has a chain and has not yet secured financing.

2. Be Responsive: Respond promptly to any requests for information from the estate agent and solicitor to keep the process moving once you have accepted the offer.

3. Prepare for Negotiations: If the survey identifies issues, be ready to renegotiate the price or offer repairs.

Can you still make an offer on a property that is “under offer”?

Buyers can still make an offer on a property that is “under offer”. While this practice is not illegal, it can be frustrating for the original buyer who thought they had secured the property. It is important to act quickly if you are making an offer on a property that is already “under offer”, as it may soon move to the “sold subject to contract” stage and then exchange of contracts.

Conclusion

Understanding the meaning of “under offer” is important for anyone involved in a property transaction. It signifies that a buyer has shown serious interest in the property and that the seller is considering their offer actively, although nothing is legally binding until contracts are exchanged. This stage often leads to additional negotiations, surveys and searches. Both buyers and sellers should remain proactive and prepared to handle any issues that arise to ensure a smooth transition from “under offer” to “sold”.

FAQs

Q. What does it mean when a property is “under offer”?
A. When a property is “under offer”, it means a buyer has made an offer and the seller is actively considering it as a starting point for further negotiations, but no legally binding contract has been entered into yet. The sale is not finalised and the property is technically still on the market.

Q. What is the difference between “under offer” and “sold subject to contract”?
A. “Under offer” means negotiations are ongoing, whereas “sold subject to contract” indicates the seller has accepted an offer and the sale is closer to fruition, although contracts have not been exchanged yet.

Q. Can you still make an offer on a property that is “under offer”?
A. You can make an offer on a property that is “under offer”, but it is important to act quickly before the property moves on to the “sold subject to contract” stage and thereafter to the exchange of contracts.

Q. What happens after a property is “under offer”?
A. Once a property is “under offer”, steps such as acceptance of the offer, surveys, mortgage approval and conveyancing must occur before the sale can be completed.

Q. How long does it take for a property to move from “under offer” to “sold”?
A. The time it takes for a property to move from “under offer” to “sold” can vary significantly depending on several factors, such as the buyer's financial situation, whether or not there is a chain involved, the time it takes for the buyer to get mortgage approval and how long conveyancing takes. It can take up to six months.