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What Does Under Offer Mean?

Property Saviour » First Time Buyers » What Does Under Offer Mean?

Under offer is when a buyer has made an offer that the seller is considering.  Estate agents use ‘under offer’ as a marketing tactic to see if anyone wishes to make a higher offer. 

When a home goes under offer, it doesn’t mean it has sold, or the sale or the transaction has become legally binding.

If a property goes under offer soon after being marketed, it can leave potential buyers wondering if estate agents are lying about offers.

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What does it mean when a home is under offer?

When a home is described as ‘under offer’, it does not mean a sale has been legally agreed upon.  Under offer means a buyer has made an offer that the seller is still mulling over. 

The transaction only becomes legally binding when contracts have been exchanged.

What is the difference between Sold subject to Contract and Under Offer?

Sold STC or Sold subject to Contract means that the seller has accepted an offer and the sale is progressing, but it is not legally binding.  Both seller and buyer have instructed solicitors to proceed to the exchange of contracts – at which point the transaction becomes legally binding.

Both buyer and seller can pull out of a transaction right up to the exchange of contracts without giving any reason.  A property sale can collapse for several reasons, including the condition of the property, the buyer’s inability to raise a mortgage or due to adverse information relating to the title, searches, and enquiries.

How to sell house fast in a slow market
Sold Subject to Contract is a misleading term because no property is ever sold until money has been paid in full!

Can you make an offer on a house that is already under offer?

When a house is under offer, another buyer can put forward an offer.  Because the contracts aren’t exchanged until at least 8 to 12 weeks after acceptance of an offer, the sale isn’t legally binding – and estate agents are obliged to forward all offers to the sellers. 

If a higher offer comes forward and the seller accepts a higher offer, then this is called gazumping.  Equally, if a buyer reduces their offer after an adverse finding on a survey or for any other reason, this is called gazundering.

According to Rightmove, a third of all agreed sales collapse and therefore, this proves that Sold subject to contract or under offer labels don’t really mean anything.

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