When you drive along and see the house you have been longing for from afar move from For Sale to Under Offer, your heart might sink, but does it actually need to? What does under offer mean?
The good news for you is that Under Offer does not mean anything in the legal sense.
It is just a term used by Estate Agents, which means the same thing as other signs you see on Estate Agent boards such as ‘Sale Agreed’ or ‘Sold, Subject To Contract’.
If you see any of these three things on an Estate Agent, there is still hope.
You could still end up buying your dream house.
What does Under Offer Mean?
The Conveyancing Process in England & Wales is a very slow, old, beast, which should have been reformed many years ago, but it hasn’t been so it continues to plunder on, very slowly.
However, the fact that it hasn’t means that you still have a chance of buying your dream home.
Under Offer simply means the following:
- A house has been put up for sale by the owner
- The Estate Agent has marketed the property to potential buyers
- One of those buyers has put in an offer to buy the property at the asking price, below it or sometimes even above the asking price
- The seller has accepted the offer
- The property is now ‘Under Offer’.
Is Under Offer Legally Binding?
No, absolutely not!
There is still so much to be done before a legally binding contract exists.
The buyer’s solicitor must carry out searches against the property to ensure that it is safe to buy, there are no nearby planning permissions which would effect their enjoyment of the property or any environmental issues to be considered.
A mortgage offer must be obtained for the buyer to ensure that they have the funds in place to pay the price that they have offered for the property.
The seller must complete The Sellers Property Information Form, which confirms everything that they know about the property (including any disputes with neighbours) and what they intend to leave in the property for the buyer.
The buyer will have to have a survey completed on the property to ensure it is a sound property for the buyer’s sake but also of the mortgage company who will secure a charge against the property to protect the money that they have leant to the buyer.
A contract must be prepared by the seller’s solicitor and checked and agreed by the buyer’s solicitor.
All of this happens whilst the property is ‘Under Offer’.
Whilst all of this his happening, and both the seller and buyer are incurring expenses, nothing legal has taken place.
Either of them can pull out of the process without any financial liability to the other one, except for their own legal costs and expenses.
What Does Under Offer Mean To Your Chances Of Buying The House?
Whilst the house is only ‘Under Offer’, you could contact the buyer through his estate agent and make an offer to buy the property for more than the original offer made.
If the seller accepts this offer, you will now be the intended buyer of the property and the person benefiting from the ‘Under Offer’ status. The process of making a higher offer when a property has already agreed to be sold, is called gazumping.
However, knowing what you now know about the meaning of ‘Under Offer’ you might want to get your skates on and get to the part where the seller is legally contracted to buy the property from you.
When Does ‘Under Offer’ Change To Legally Binding?
Nothing is legally binding until the contracts that we mention above are exchanged.
What does exchange of contracts mean?
Well, it is quite a literal term.
Both the buyer and the seller hold identical copies of the contract, and when everyone is ready to proceed, they have a telephone call where they ‘Exchange’ these contracts.
The period when the house or apartment was ‘Under Offer’ has now expired, and a legally binding contract has been formed.
Now, it is more likely than not that the sale will proceed.
What Happens Next?
The final part of the conveyancing puzzle is Completion.
Completion is the day when the money is paid by the buyer’s solicitor to the seller’s solicitor and the keys for the property are released to the buyer so that they can move in.
The average time for completion after exchange is usually around two weeks, but it can be longer.
You might want to read up on what can go wrong between exchange and completion if you are buying a property.
Otherwise, happy house buying, and if you need a specialist conveyancing solicitor, we are here to help.
Please either call us now on 0845 1391399 or complete a Free Online Enquiry ».
