Are you looking to buy a house?
When doing so, you may spot a property that’s listed as ‘under offer’.
We’ve explained what this means in the blog below.
What does ‘under offer’ mean?
When a house is ‘under offer’, it means that a reasonable price has been presented to the seller.
The seller is interested and negotiating terms with the buyer. But the conveyancing process has not started yet.
Estate agents typically advise a homeowner to change the status to ‘under offer’.
It can create a sense of urgency because the house is in demand. This may encourage other buyers to put in a competitive offer, too.
Once conveyancing begins, the status will often change to sold subject to contract (SSTC).
Under offer vs. sold subject to contract
A house under offer signifies that a buyer has made an offer that the seller is considering. Negotiations are ongoing, and the conveyancing process hasn’t started.
Sold subject to contract means the seller has accepted an offer, and the legal process is underway.
While promising, it’s not legally binding until the exchange of contracts. Issues during this stage can still cause the deal to fall through.
Under both categories, the sale isn’t legally completed. The property is still on the market and other offers can be made.
Will all properties show as under offer?
No. It’s rare for a homeowner to consider this on their own. It’s usually the estate agent that suggests it – and not all experts think it’s a worthwhile idea.
Similarly, some estate agents are too inefficient to update the house status on a daily or weekly basis.
In many cases, the homeowner doesn’t want much time to consider an offer.
They may accept it quickly. This makes it unlikely that the house will ever be labelled as ‘under offer’. It could then change to ‘sold subject to contract’.
Can a house under offer fall through?
Yes, a house under offer can fall through.
The sale isn’t binding and either party can back out. Other potential buyers are allowed to make a last-minute offer, too.
Reasons an under offer house can fall through
It’s not a certainty that an under offer house will sell with the current buyer. There’s plenty of reasons it could fall through.
A higher offer is made
Gazumping is when a new buyer makes a higher offer at the last minute, and the seller chooses them instead. It happens fairly often.
There’s risk involved with this because there’s no guarantee that the new buyer is trustworthy, nor making a legitimate offer.
Unexpected problems appear
It’s possible for unexpected issues to appear in the selling process. Maybe a revelation about the buyer shows that they’re untrustworthy.
Or perhaps an issue with the house appears with the house that wasn’t known about it. These things can cause either party to walk away.
One of the parties changes their mind
It’s not impossible that one of the people involved will change their mind. Maybe the buyer decides they prefer another house. Or that they don’t want to move yet.
The seller may go off the buyer, too. Or decide that the current price is unacceptable. This often results in the deal collapsing.
Conveyancing creates issues
When a house is listed as under offer, it means the conveyancing process hasn’t started yet.
This is one of the most common reasons that a house sale collapses. Plenty of problems with the property (or the buyer!) can appear during conveyancing.
Can I view a house that’s under offer?
In many cases, yes. But it depends on the homeowner and the estate agent.
Some sellers continue to hold viewings as a ‘backup’ option. Others may consider it wrong – especially if it damages the relationship with the existing buyer.
Estate agents will advise homeowners on this subject, too.
If you want to view a house that’s under offer, speak to the estate agent marketing it. Even if the seller says no, there’s no harm in showing interest.
You may be the next contact if the original sale falls through.
How long does a house stay under offer?
It’s possible for a house to stay under offer indefinitely. Although, this rarely happens. Most of the time, this status will remain for up to a few weeks.
Both the buyer and seller are keen to move things quickly.
Even if there’s slight disagreements over price, the seller will often accept this, rather than starting all over again.
Once the sale moves along, the status will often be changed to ‘Sold Subject to Contract’. This means that conveyancing has begun between the two parties.
You’re still allowed to make an offer on the house during this time. It’s known as ‘gazumping’ to do this, when your offer is higher. Some people view it as immoral, while others don’t mind.
It’s worth registering your interest in a property that is ‘sold subject to contract’. Deals can fall apart, even at the last moment. This can put you in prime position.
