What Does “Under Offer” Mean in Real Estate?
Buying a home can be both exciting and confusing, especially when you encounter industry-specific terms like “under offer.” If you’ve seen this phrase while searching for properties, you might wonder what it means and how it impacts your next steps. This article will break it down, so you’re well-prepared to navigate the real estate market with confidence.
What Does “Under Offer” Mean?
In real estate, the term “under offer” indicates that a seller has accepted an offer from a prospective buyer, but the sale is not yet final. This stage represents a conditional agreement where certain steps and conditions need to be satisfied before the transaction proceeds to a legally binding contract.
Key Characteristics of “Under Offer” Status
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Conditional Agreement: The seller has agreed to the buyer’s proposed price and terms, but the sale is subject to conditions such as securing financing or completing inspections.
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Property Still on the Market: While a property is under offer, it may still be listed online or available for viewings. Sellers might accept backup offers in case the original agreement falls through.
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Progress Toward “Under Contract”: Once all conditions are met, and contracts are exchanged, the property’s status moves to “under contract,” a key step before settlement.
Can You Make an Offer on a Property That Is “Under Offer”?
Yes, it’s possible to submit a backup offer on a property that is under offer. Since the initial agreement isn’t legally binding until contracts are signed, a seller might entertain alternative offers if the first deal doesn’t progress. If you’re keen on a specific property, staying in touch with the real estate agent can keep you informed about its availability.
The Process of Moving to Settlement
To understand what happens after a property is under offer, here’s a step-by-step overview:
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Offer Acceptance: The seller formally accepts the buyer’s offer, and both parties enter into a conditional agreement.
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Condition Fulfillment: Buyers work to satisfy agreed-upon conditions, such as securing a mortgage, conducting building inspections, or confirming property valuations.
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Contract Exchange: Once all conditions are met, the buyer and seller sign a legally binding contract, moving the property status to “under contract.”
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Cooling-Off Period: In many Australian states, buyers have a statutory cooling-off period to reconsider their purchase. This timeframe varies by state:
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NSW & QLD: 5 business days
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VIC: 3 business days
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SA: 2 business days
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WA & TAS: No mandatory cooling-off period
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Settlement: The final step, where ownership transfers from the seller to the buyer, completing the sale.
How to Navigate the “Under Offer” Phase
For Buyers:
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Stay Flexible: Be prepared to act quickly if conditions or timelines shift.
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Communicate Regularly: Keep in touch with your solicitor or conveyancer to ensure the process stays on track.
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Explore Alternatives: Don’t pin all your hopes on one property; keep other options in mind.
For Sellers:
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Consider Backup Offers: Keeping your options open can mitigate risks if the initial deal falls through.
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Be Transparent: Communicate clearly with all interested parties to maintain trust and avoid misunderstandings.
Final Thoughts
Understanding what “under offer” means and how it fits into the broader real estate process can help you make informed decisions, whether you’re buying or selling. For buyers, it’s a sign to remain proactive yet cautious. For sellers, it’s a step closer to finalizing the sale.
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