What Does Under Offer Mean in Real Estate? 

What Happens When A Property Is Under Offer?

When a property is labelled as under offer, it means the buyer and seller have agreed on the transaction terms, but the sale is not yet final. There could still be several possible outcomes. The buyer and seller can agree to cancel the sale before exchanging contracts. The buyer can change their mind and pull out of the sale before the exchange of contracts (in this case, the deposit that the buyer made is lost). The seller can decide to accept a better offer from another buyer. The property can fail to pass surveys or valuations, leading to the sale falling through. If everything goes well, the sale will be complete, and the property will be marked as "sold."

Conditions To Go From Under Offer To Sold

For a property to be officially marked as "sold," there are certain conditions that must be met. These include:

Subject To Finance: To purchase a property in Australia, it is important to have a pre-approval letter from a bank or lender. The contract of sale will include a "subject to finance" clause, meaning the buyer's purchase is contingent on securing financing.

Subject To Building And Pest Inspections: In Australia, buyers often add an inspection clause to their purchase contract. This allows them to request a building and pest inspection before making an offer. If the inspection reveals major issues, the buyer can renegotiate the property price or cancel the contract.

Steps Involved When A Property Is Under Offer

There are several steps involved in the process, from surveys and negotiations to exchanging contracts and completing the sale. Here are the steps:

Step 1: Conducting Surveys And Searches: After accepting an offer, the buyer must conduct surveys and searches on the property to spot any potential issues such as structural problems, boundary disputes, or issues with the local authority.

Step 2: Negotiating The Contract: After surveys and investigations, the buyer's attorney drafts a contract, which is then reviewed and negotiated by the seller's attorney.

Step 3: Paying The Deposit: After signing the contract, buyers must pay a non-refundable deposit of approximately 10% of the property's purchase price to the seller's solicitor, who will hold it until the contract exchange.

Step 4: Exchanging Contracts: After receiving the deposit and agreeing to the terms of the contract, the solicitors for the buyer and vendor will determine a time to exchange contracts.

Step 5: Completion Day: On the closing date, the buyer takes possession of the property, and the purchase price is transferred to the seller's attorney.

Difference Between "Under Offer" And "Under Contract"

An offer would have been made when a property is marked as "under offer" or "under contract." "Under offer" suggests that the vendor has accepted a conditional offer, whereas "under contract" indicates that a binding contract has been reached. Offers can be made at any time, and the property can still be marketed.

Can You Make An Offer On A Property That Is Already "Under Offer"?

The seller is not obligated to take into consideration any more offers on a property that is "under offer," as another offer has already been accepted. It is important to avoid making offers on "under contract" properties as

the seller cannot consider them. Always use a reputable real estate agent to negotiate and avoid making offers you cannot fulfil, which in turn can damage your reputation.

Expert Advice from Reputable Real Estate Agents

When buying a property, seeking expert advice from reputable real estate agents is crucial. Real estate agents can guide you through the process and avoid costly mistakes. AB Realty WA is one such reputable real estate agency that offers professional guidance in all aspects of property transactions.

What does "under offer" mean in real estate?

"Under offer" means that a potential buyer has made an offer on a property, and the seller has accepted it, but the sale is not yet finalised due to some conditions that need to be fulfilled.

What happens when a property is under offer?

When a property is under offer, the buyer and seller have agreed on the transaction terms, but the sale is not yet final. The buyer must fulfil certain conditions before the property can be officially marked as "sold."

Can a seller accept another offer when a property is under offer?

Yes, the seller can still accept other offers when a property is under offer. However, if the first deal falls through or the buyer pulls out, the seller can consider the other offers.

Can a buyer make an offer on a property that is already under offer?

Yes, a buyer can still make an offer on a property that is under offer, but the seller is not obligated to consider it.

What are the conditions that must be met to go from under offer to sold?

To go from under offer to sold, the buyer must fulfil certain conditions, such as securing financing, completing building and pest inspections, and exchanging contracts.

What is the difference between "under offer" and "under contract"?

"Under offer" suggests that the vendor has accepted a conditional offer, whereas "under contract" indicates that a binding contract has been reached.

Can a buyer change their mind after making an offer on an under offer property?

Yes, a buyer can change their mind and pull out of the sale before the exchange of contracts. However, in this case, the deposit that the buyer made is lost.

What should a buyer do when a property is under offer?

When a property is under offer, a buyer should understand the details of the offer, including any requirements or deadlines, to avoid misunderstandings or disagreements in the future. It is also advisable to seek guidance from reputable real estate agents to navigate the process smoothly.