October 20, 2022
The real estate market abounds with legal terms that are not often easy to understand. One such term is ‘under offer’ — if you’ve seen this on a property listing, you probably wondered what it means.
In this guide, we’re going to explain the meaning of under offer, when and where it’s used, why estate agents tend to use it, and how it differs from other real estate terms. So continue reading to understand this intricate real estate strategy!
What Does Under Offer Mean?
The term ‘under offer’ is used by estate agents to signify that a vendor has accepted an offer on the property listed for sale — either below or above the asking price. However, even though the seller has accepted an offer, it’s regarded as an ‘incomplete sale’ as long as the property is listed under offer.
During this time, various surveys are done on the property, mortgages need to be approved (read more about getting a mortgage), and there’s still the possibility of the sale falling through. No contracts are signed when the property is under offer, so the sale is not legally binding, and prospective buyers can still bid for a property.
Why List a Property Under Offer?
Keep in mind that the under offer meaning is sometimes used to indicate that the seller is merely considering an existing offer and is open to accepting a better offer.
In some cases, estate agents use the ‘under offer’ listing as a marketing strategy in order to attract more offers and boost the property price. It may sound unfair, but both vendors and agents want to achieve the best price in a competitive market, and listing properties ‘under offer’ can help.
|DID YOU KNOW? After the sudden drop in house sales in the UK during the pandemic in 2020, things are slowly getting back to normal. The latest numbers from February 2022 show that there have been 47,000 completed house sales in the UK.
Can You View a Property Under Offer?
Once you understand ‘what does under offer mean’ in the UK property market, you may be wondering whether it’s possible to view under offer properties. In short, it is possible to arrange a viewing of a property listed as under offer; there are no legal obligations forbidding sellers and agents to show the property to other prospective buyers.
In essence, the house or flat listed ‘under offer’ is technically still on the market, so there’s nothing stopping sellers from arranging further viewings, accepting a higher offer, and deciding on a quick sale.
However, as a seller, besides understanding the under offer meaning for UK properties, you need to be aware that allowing viewings while the property is under offer may harm the relationship between you and the current buyer. However, these viewing can also be thought of as a ‘safety net’ for the vendor in case the sale falls through due to unforeseen circumstances.
Ultimately, whether or not you’re granted a viewing depends on the estate agent and the vendor, so it’s best to consult them before you take a look.
|DID YOU KNOW? Some numbers from 2020 show that there were 226,000 empty homes all across the UK, indicating that there’s a lot to choose from if you’re a prospective homebuyer.
Can You Purchase a Property Under Offer?
We already gave an answer to ‘what does it mean when a house is under offer’ and explained that there’s nothing stopping vendors from showing these properties. Nonetheless, if you’re a prospective buyer, you may wonder whether it’s possible to actually purchase a property under offer.
The short answer is — Yes. You are free to make an offer, and the estate agent is obliged to pass it on to the vendor. It’s more likely that the seller will accept an offer if it’s higher than the previous one and you’re willing to pay in cash, so saving up for a house is a good idea.
If you already know the answer to the ‘what does under offer mean’ question, you also know that no contracts have been signed at this stage of the selling process. So new buyers are free to make a better offer, and the seller is free to accept it — this is known as ‘gazumping’.
|DID YOU KNOW? Another commonly used term in real estate is ‘guide price’. This is used to indicate the seller’s minimum expectation for the property sale, although most sellers are hoping for more. However, the property may eventually be sold for more or less than the guide price.
|The term ‘under offer’ signifies that a seller has accepted an offer on a property, but the sale has not been finalised
|The ‘under offer’ is not legally binding, and sellers are free to arrange new viewings and consider other offers
|Purchasing a property under offer is known as ‘gazumping’, i.e. giving a better offer than the previous buyer
|A house/flat can stay under offer indefinitely, although most properties are listed under offer between 8 and 12 weeks
|When properties are listed as Sold STC, agents no longer arrange viewings, and they cease to accept other offers
How Long Does a House Stay Under Offer?
There are no legal limitations regarding the amount of time a property is listed ‘under offer’; as far as the law is concerned, a house or a flat can stay under offer indefinitely. However, this is rarely the case; in most cases, properties don’t stay under offer way too long.
The exact amount of time it takes for a property to go from ‘under offer’ to ‘sold’ depends on the solicitors’ efficiency, but also on many other actions that need to be completed before the sale is finalised — property surveys, mortgage valuation, mortgage in principle, arranging a deposit funding, and agreeing on a completion date.
Now you know what does under offer mean in real estate and why it’s important for both buyers and sellers. Just remember that the average time it takes to go from offer to completion in the UK is between 8 and 12 weeks.
|DID YOU KNOW? In the UK, the majority of properties are put up for sale in spring, and most buyers move into their new homes in August. The period from spring to late summer is the amount of time it takes to find a buyer and finalise the purchase.
Under Offer vs Sold STC: What’s the Difference?
Sold STC, or Sold Subject to Contract, is a term used in real estate which signifies that a seller has accepted an offer and the conveyancing process is about to start. When a property is marked Sold STC, the sale is still not finalised, and it’s not legally binding — much like when a property is marked under offer. But even though it seems that these two classifications are identical, there is one striking difference.
The main difference between under offer and sold STC lies in the arrangement of further viewings. When properties are listed as under offer, estate agents may still arrange viewings and be open to accepting new offers, while agents won’t arrange any new viewings when properties are marked sold STC. So, if you see a listing with ‘Sold STC’ next to it, don’t waste your time putting in an offer — try your luck elsewhere!
|DID YOU KNOW? ‘OIEO’ or ‘Offers in Excess Of’ is another expression often found in the real estate industry. The OIEO is a financial sum that signifies the starting point for a bid on a property, meaning that the seller will accept only offers higher than the specified amount.
Whether you’re a buyer or a seller, it’s important to understand the under offer meaning for the UK property market, when and why this particular term is used, and how to use it to your advantage.
Hopefully, this guide has helped you understand the meaning of this term and how you can benefit from it regardless of whether you’re looking to sell or buy a property in the vast UK real estate market.
In most cases, properties that are under offer are open for viewing, and estate agents are still open to accepting new offers. Legally, there’s nothing stopping you from submitting an offer on the house under offer, so you might as well try your luck.
When a house or a flat is under offer, the vendor is either considering or has accepted an offer, although the sale hasn’t been finalised, and there’s still room for either one or the two parties to back out from the sale.
When you know the answer to ‘what does under offer mean’, you’ll see that the difference between this listing and the ‘sold’ listing is in the finality of the sale. While under offer, the property sale is not final, but when you see it listed as ‘sold’, the sale has been finalised.