A property is marked as ‘under offer’ when its seller is considering an offer from a buyer but has yet to fully accept or reject that offer.
The seller might be keeping an offer under consideration without accepting it for a variety of reasons. These could include the offer being less than they had hoped for, or the buyer needing additional time in order to organise their finances. It could also mean the buyer has yet to sell their own property and this being the case, is unable to proceed with a new purchase.
Under offer is often considered an interim step between on the market and sold. Critically it means that the conveyancing process will not have yet started and hence the sale is on hold.
When and why is a property “under offer”?
Your house or flat is considered “under offer” when you have an offer from a potential buyer, but you are yet to fully accept it.
When you are selling a property, you might well have a good reason to not accept an offer, but beyond making a counteroffer, you shouldn’t reject any either.
This is for a couple of good reasons.
Firstly, you may have a very keen buyer offering the full amount who unfortunately needs time to get their finances together.
This often involves them organising a mortgage, selling their own property. It may even mean them having to raise additional funds beyond this.
Arranging finances can take some time, especially if it turns out your buyer cannot easily raise the required funds. However, the buyers could serve as something of a backstop, helping to ensure the sale of your property given time.
Often, when you have a buyer who takes a long time to organise their finances it can make sense not to reject the offer out of hand and instead keep it under consideration. This gives the buyer time to get organised and the chance to purchase your property. It also lets you keep the property on the market in case another buyer comes along in a stronger position.
Additionally, being able to describe your house as under offer has substantial marketing benefits. When a house or flat is under offer, it will often be advertised as such by your estate agents in order to show that it is desirable. This can give other potential buyers a sense of urgency and spur them into considering viewing and making an offer for your property.
Can I still buy a house which is under offer?
Yes!
You can always make another offer on a property which is under offer. Until contracts are exchanged the seller is allowed to accept any other offer which comes their way.
If a second, or even multiple offers are made while a property is under offer, the sale effectively becomes a race between buyers to convince the seller to exchange contracts with them first. This is because once contracts are exchanged, the agreement to sell becomes legally binding having followed the standard conveyancing process.
In order to buy a house which is under offer you will need to bring something additional to the transaction that the previous offers do not.
This can be as simple as:
- offering more money
- having already sold your own property and able to proceed fast
- having all the capital to hand quickly
- having a far more efficient conveyancer
It could also be due to something more esoteric, like the seller taking a shine to you and thinking you will be a better custodian of the property than the other potential buyers.
Sometimes, sellers are unwilling to offer additional viewings after they receive an offer which they are mostly happy with. This is to avoid offending the original buyer, and risking losing the sale. It could also be to avoid the disruptions to their home life.
Generally, when this is the case, you will have to make an offer blind, and should expect it to be turned down if it is not substantially higher than the asking price.
How long can a house stay under offer?
In theory, a property can stay under offer indefinitely, but in reality, this is never the case.
Both buyers and sellers tend to want things to move quickly, because whatever motivation they had to buy or sell will still be present.
Even if a seller has not been offered quite the asking price, they are often inclined to accept offers as they would rather get a guaranteed sale now over a more profitable sale in the future. More often than not this is because they need the sale proceeds to buy their next property themselves.
Usually, it does not take long from a house being under offer for a seller to decide to accept it. After a seller accepts an offer, the house will be marked as ‘sold subject to contract’.
What does “sold subject to contract/SSTC” mean?
A property is sold subject to contract, or SSTC when the seller has accepted an offer, but the legal conveyancing process is still incomplete.
Technically the difference between a property being sold subject to contract and under offer is semantic, meaning legally the status is the same. Normally, however, when a property is sold subject to contract there is a gentleman’s agreement between the seller and the buyer for the seller not to accept any other offers.
None the less it is still legal and possible to interrupt the sale at this point. This is normally done by making a substantially higher offer than the original buyer. Stepping over another person’s property purchase like this is called gazumping and whilst this is still legal, it is typically considered unfair.
If you see your dream property listed as SSTC with an estate agent you should still contact them even if you do not wish to gazump as many sales fall through and having another buyer on hand can be very useful.
What does under offer mean in Scotland?
In Scotland, the conveyancing process varies slightly from the process used in England and Wales. One of the key differences is the meaning of under offer.
North of the border, when a property is labelled as under offer it means the seller has accepted an offer in writing, and it is ‘STCM’. There is no sold subject to contract stage in Scotland. Instead, they use the term STCM, which means Sold Subject to the Conclusion of Missives. This means the same thing as under offer.
While gazumping at this stage is still legal in Scotland it is considered very unfair.
Summary
A property being marked under offer in England or Wales means that an offer has been made for it, but this has not yet been accepted.
Typically, the phrase under offer is used as a marketing term to try and convince potential buyers on the fence to make their own offers. This is so the seller can pick the best and move on with a sale.
Following an offer being accepted, the property will be tagged as sold subject to contract. While both buyer and seller can still freely pull out at this stage, trying to ‘steal’ the property from the buyer by offering more money is called gazumping, which can be considered rude.
Things are slightly different in Scotland, where the term under offer is used as a synonym for Sold Subject to the Conclusion of Missives. This means the seller has accepted a bid rather than indicating they are considering offers.
This is essentially the same as the meaning of SSTC south of the border, and any attempt to buy a property which is under offer in Scotland will be seen as gazumping in the same way as offering to buy an already SSTC property would be in England.
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