What does it mean when a property is ‘under offer’ in the UK? Is it different to sold ‘subject to contract’? Can you still make an offer if a property is already under offer?
The process of buying a house can seem overly complicated. So many words and terms get thrown around by property professionals. We answer the questions that buyers and sellers frequently ask, using simple language to help explain the buying and selling process. It doesn’t need to be confusing!
What does it mean when a house says ‘under offer’?
Under Offer (UO) means that a buyer has made an offer (usually under the asking price) and the owner is considering whether or not to accept that offer. Some agents will also use this term for properties where the owner has accepted an offer, but all the paperwork has not yet been completed.
Can I make an offer on a house that is under offer?
If a property is ‘under offer’ you can still make an offer of your own. Until all the paperwork has been signed and exchanged, the buyer and seller do not legally have to proceed with the sale. Sales fall through for as many as 25% of properties listed as ‘under offer’ or sold ‘subject to contract’ (see below). So, it’s worth asking the agent about making an offer of your own!
What does ‘subject to contract’ mean?
When a property is being sold ‘subject to contract’ (STC) it means the seller has accepted an offer from a buyer. The property sale is not complete, however, so you can still enquire about it and make an offer of your own. Only when both buyer and seller have signed and exchanged contracts can the seller no longer accept new offers from interested buyers.
What is the difference between ‘subject to contract’ and ‘under offer’?
The terms ‘sold subject to contract’ and ‘under offer’ can both be used to mean the same thing: A buyer has made an offer and the seller has accepted, but no contracts have been signed. The main difference is that ‘under offer’ can also mean that a buyer has made a reasonable offer but the seller has not yet accepted it.
Generally, estate agents will refer to a property as being ‘sold STC’ when an offer has been accepted by the seller, but they haven’t exchanged contracts yet. Increasingly, this is being used as a marketing term to suggest the estate agent’s ability to get property sold quickly and efficiently.
Under offer vs sold STC is a small consideration, but it can be an important one. In either case, check with the estate agent handling the sale if you want to know if there’s a chance to put your own offer in.
How do I avoid being gazumped?
If you’ve been gazumped this means that offer on a property has been beaten by another buyer’s offer. This can be very frustrating, especially if you’ve already paid for legal services, surveys, mortgage costs, etc.
Avoid gazumping by being as organised as you can. The faster you’re able to complete all the steps before contracts are exchanged, the better. It’s also worth getting to know the seller – a good relationship is very helpful. You can also ask them and their agent to take the property off the market. However, they don’t have to do this.
How long does a house stay under offer for?
Generally a house won’t stay under offer for long. The buyer, seller and agent will want to get contracts signed as soon as possible after the offer has been accepted. However, the buyer will need to complete a number of actions before a contract is signed. These include an agreed offer, mortgage valuation and mortgage in principle, surveys required, searches by the conveyancing solicitor, deposit funding arranged and completion date agreed.
Specifically, how long from ‘under offer’ to ‘sold’ will you have to wait? This depends entirely on the speed and efficiency of both sides’ solicitors. However, you can speed the process up by providing all necessary information and paperwork promptly.
How long can a house be under offer for?
There is no set maximum or minimum period for how long a house can remain under offer. The property can remain under offer for as long as both parties continue to work through the contract-making and exchanging process.
When do I make an offer on a house?
You should make an offer on a property when you are seriously interested in buying that property. So what happens after you put an offer in on a house? The offer will usually involve the following stages:
The buyer makes a written offer for the property.
The seller either accepts, counters or rejects the offer.
If the seller counters the offer, the buyer either accepts the counter or goes back to step 1. to make another offer.
If the seller accepts the offer, the buyer will continue the process towards exchanging contracts.
If the seller rejects the offer, the buyer can either make a new offer (step 1.) or continue looking elsewhere.
Can I view a property under offer?
You can view any property that’s under offer, there is no legal reason stopping you. Estate agents may still set up viewings even if the seller is considering an offer, in the hope that they attract a competing buyer that will drive up the sales price.
However, if a seller is seriously considering an offer, or has already agreed to one (sold STC), they may not be interested in taking new viewings. This is a personal preference; it depends on what the seller’s priorities are. Still, there is no harm in asking.
Should I offer less than the asking price?
The amount you offer for the property you want depends on a number of factors. Firstly, and most obviously, your budget is the first thing to consider.
Next, you’ll need to do some research on the property. How long has it been on the market? Has it been listed at the same price for that time? How much interest has there been in the property? How keen is the seller on selling quickly? A good estate agent will be able to guide you through many of these questions. Your offer must appear serious – it benefits all involved if you’re well organised and have everything you need in place.
Can I put an offer on a house without an offer on mine?
You can still make an offer but, depending on the market, your offer might not be taken seriously. It isn’t recommended to put an offer on a house until you have at least accepted an offer on your own property. Having an offer accepted on your home will give you more negotiating power when making an offer on the property you want to buy.
Can an estate agent tell you about other offers?
Estate agents are not legally allowed to tell you the exact amounts of other offers on a property. However, they can give you an idea of how close those offers might have been to the asking price. A good agent will guide you to the best offer you can make while still securing the property you want.
What does OIRO mean?
O.I.R.O. means ‘offers in the region of’. This gives buyers an indication of the expected selling price. They might be willing to accept a little less, but would like to be offered a little more!
How do I reserve a new build property?
New homes developers all have a slightly different process to reserving your new property. However, you will generally be able to pay a reservation fee to reserve the property you want. As an example, Fairview Homes require the following: reservation fee, 3 months’ payslips and latest P60, 3 months’ bank statements, proof of exchange deposit/proof of purchase funds, copy of your passport and proof of address (recent utility bill or driving licence).
Can I outbid an accepted offer? And can the seller accept?
Yes, you can outbid an accepted offer and yes, the seller can accept your offer. The estate agent must tell the seller about all offers.
A property is only off the market once contracts have been exchanged. If there is a property that you are interested in and it is ‘under offer’ or ‘sold subject to contract’, you can certainly still bid for that property.
Does ‘under offer’ mean a house is sold?
When a property is under offer, it simply means someone has made an offer to buy the property. It doesn’t mean that the property has been sold, and there is nothing legally binding about the situation. You may be able to make an offer on a property while it’s under offer, though some estate agents prefer to allow the prospective buyer and seller to attempt to reach an agreement before fielding alternative offers.
Is ‘under offer’ the same as ‘sale agreed’?
‘Under offer’ and ‘sale agreed’ represent different stages of the property purchasing process. When a house is under offer, this means the prospective buyer has made an offer, which the seller is considering, or negotiating with the buyer. Sale agreed, on the other hand, means that the buyer and seller have reached an agreement on the price, and the transaction is proceeding.
Can a property under offer fall through?
Because a property under offer hasn’t reached the stage of agreement between the buyer and seller, the transaction could still fall through. If the buyer and seller are unable to reach an agreement, or if either party changes their mind, then it’s still possible to pull out of the deal. An ‘under offer’ status isn’t legally binding, and neither the buyer or seller is under any obligation to continue with the transaction.
Is under offer legally binding?
An offer to buy a property is not legally binding in any way, either for the buyer or the seller. Either could pull out at any time, or for any reason. Neither the buyer nor the seller has any obligation to proceed with the transaction, and neither needs to provide a reason if they want to withdraw their offer, or take the property off the market.
Can the seller change the asking price while the house is under offer?
It’s perfectly legal and above board for the seller to change their asking price for the house after receiving offers. This might mean the seller renegotiates with buyers who already have an offer on the table.
They might also reject any current offers and inform their agent to notify interested parties of an increase in price, to see if it results in improved offers. Some sellers might consider this approach risky, though, as it involves rejecting an offer that currently stands in the hope that a buyer might be prepared to up their offer.
Can you be fined for pulling out of an offer?
In England, Wales and Northern Ireland, both buyers and sellers can pull out of an offer without any kind of fine or financial penalty. This is not the case in Scotland. If you are a buyer and withdraw your offer, the seller can either take you to court for damages, or settle on some level of financial compensation. Generally, this will amount to the costs of remarketing the property, and/or the value difference between the initial offer and the final offer accepted by the seller.
Are there any plans to change the property buying/selling system in 2023?
Currently, there are no major changes planned that will affect the process of buying, selling and making offers for UK property in 2023. The whole system is not mandated by law in England and Wales, but is instead a “broad framework in which the parties are free to decide how to shape their own transactions” according to Gov.uk guidance.
However, the system is under review by Parliament, which has several incremental changes under suggestion for possible implementation in the coming years. Their main goal is to ensure that the time it takes to complete property transactions is reduced while transparency is improved for all parties.
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