What does ‘under offer’ mean?
22nd October 2024When searching for a new home for sale or a property to LET, you’ll likely come across countless pieces of industry jargon that boggle the mind and may even alienate you in your hunt. Yet, we’re here to clear up this confusion, informing you in this blog about what the term ‘under offer’ means among a range of other connected questions.
At Jon Simon, we are expert estate agents offering properties for sale across Greater Manchester and Lancashire, including locations in Burnley, Radcliffe, Bacup and Ramsbottom. With over 15 years of experience, our team is here to guide you through the process of securing your new dream property, contact us now and explore our blogs on our website to discover the meanings of such terms as ‘LET agreed’ to help you get more informed.
So, what is the meaning of ‘under offer’?
Put simply, the term ‘under offer’ means that a prospective buyer has made an offer that has been accepted by the seller. Yet, this doesn’t mean that the deal is done, as both parties are not yet legally bound and can exit the agreement as and when they please. A potentially dangerous status to be in for buyers, this stage leaves them open to being gazumped by other potential parties.
At this stage in the selling process, no home surveys have been completed on the property and no legal paperwork has been signed. The seller will still be pondering your offer, having not made a final decision, crucially meaning that the property is not yet ‘yours’. Until they have accepted your offer and moved the status onto ‘sold STC’, you are still competing with other prospective buyers.
What is the difference between ‘under offer’ and ‘sold STC’?
‘Sold STC’, or ‘sold subject to contract’, is the next stage of your buying process. While ‘under offer’ means that the seller is still considering your bid, sold STC indicates that the offer has been accepted. At the ‘sold STC’ stage, work is started between you and your solicitor to confirm your mortgage and carry out the necessary conveyancing searches.
During this step, the buyer can still withdraw, particularly if the survey results are insufficient. Aspects like structural damage or dampness may alter the structure of the deal, resulting in it falling apart. Gazumping can still occur at this stage, too, since there has not yet been an exchange of contracts that makes the purchase legally binding.
What is the duration of the ‘under offer’ period?
Purchasing a house can take a long time to get over the line, with the ‘under offer’ period being no different. Exactly how long this period takes will vary from one case to the next. Usually, the process will last an average of 11 weeks, ending with the completion of the sale, however, this can vary drastically from one transaction to the next.
This process can be quicker if there is no mortgage application tied into the sale. The length of the conveyancing period can be lengthened when there are complications in confirming the paperwork, or if, for example, the seller only owned part of the property, meaning several other parties had to be contacted in order for the offer to be accepted and the sale to be completed.
Can other offers be made when a home is ‘under offer’?
It may feel like you have the property you want once you’re in the ‘under offer’ phase, but this is certainly not the case. Even if the property that you’re monitoring is ‘under offer’, other offers from outside parties can still gazump you. Indeed, until all the paperwork has been signed and sealed with a contract exchange, the property is still up for grabs.
The world of property can be a very competitive space, with there often being multiple other parties who are interested in the very same property that you already have your heart set on. It is not uncommon for sales to fall through at this point so it’s important to stay vigilant and comply with any estate agents or solicitors promptly so that you can get the property you want.
What is gazumping?
Although the peculiar phrase originates from the Yiddish word ‘gezumph’, which means to cheat or swindle, there is nothing illegal about gazumping. The word gazumping simply refers to when another party makes a higher offer on a property that you’re already in the process of buying, therefore putting themselves in a pole position to win the deal.
But the good news for buyers is that gazumping can be avoided if precautionary measures are taken. Largely this involves completing your paperwork quickly, giving any other prospective buyers limited time to respond and gazump. This can be helped by getting an agreement in principle with the seller or by asking the seller to remove the property from the market, making the sale effectively invisible to the outside world.
Searching for rentals or homes in Manchester? Contact Jon Simon
At Jon Simon, we make the process of purchasing a new property as effortless as possible. Experts in the field with over 15 years of experience, we offer exemplary houses for sale and properties to rent in Lancashire or Greater Manchester, with offices in Burnley, Radcliffe, Bacup and Ramsbottom. Guiding you through every step of the process, from your first bid to the signing of the contract, you can trust us to get you over the line.
Contact us now to enquire about any of our properties or request a valuation online and discover exactly how much your home could be worth, setting you off on your journey to selling your property.