When navigating the Australian real estate market, you may come across various terms that can be confusing, especially if you’re new to buying or selling property. One such term is “under offer.” Understanding what does under offer means can help you make informed decisions whether you are a buyer or a seller. In this article, we’ll dive into the meaning of “under offer,” how it affects the buying and selling process, and what steps you should take if you’re interested in a property that is under offer.
What Does Under Offer Mean?
Under offer refers to the stage in the real estate transaction where a seller has received an offer from a buyer and is considering it, but the sale is not yet finalised. This status is not legally binding and is subject to further negotiations, inspections, and the fulfilment of certain conditions.
Key Aspects of the “Under Offer” Status
- Negotiation Phase: The property is still in the negotiation phase between the buyer and seller.
- Not Final: An offer has been made, but conditions such as financing, inspections, and other contingencies need to be met.
- Exclusive Period: Generally, while under offer, the seller will not entertain other offers, giving the current prospective buyer a chance to complete their due diligence.
How “Under Offer” Works in a Transaction
The process of a property going under offer involves several steps that both buyers and sellers must understand to navigate the transaction smoothly.
- Making an Offer: A potential buyer places an offer on a property they are interested in purchasing.
- Acceptance of Offer: The seller reviews the offer and decides whether to accept, reject, or counter the offer.
- Due Diligence: Once an offer is accepted, the buyer conducts due diligence, including property inspections and securing financing.
- Meeting Conditions: The buyer works to meet any conditions set out in the offer, such as a satisfactory building inspection or loan approval.
- Finalisation: If all conditions are met, the offer moves towards settlement, at which point the status will change to “sold.”
Implications for Buyers
For buyers, an “under offer” status means that there is a potential pathway to ownership, but several steps remain.
- Be Prepared: Have your finances in order, and be ready for possible negotiations.
- Act Quickly: Conduct inspections and finalise your loan swiftly, as the period under the offer is often limited.
- Stay Informed: Keep in communication with your real estate agent to ensure you meet all necessary conditions before the offer becomes unconditional.
Implications for Sellers
Sellers should also be aware of what the “under offer” status entails for them.
- Multiple Offers: Sometimes, sellers can accept a backup offer in case the primary offer falls through.
- Preparation for Change: Be prepared for the offer to potentially fall through if the buyer does not meet their conditions.
- Communication: Maintain open lines of communication with your real estate agent and potential buyer to aid a smooth transition to the sale.
How “Under Offer” Differs from “Sold” and “For Sale”
- For Sale: A property listed as “for sale” is on the market and available for offers.
- Under Offer: The property has an offer that the seller is considering but which still needs to meet all conditions to be final.
- Sold: All conditions have been met, contracts have been exchanged, and the property transaction is completed.
Frequently Asked Questions
Q: Is it possible to see the home that is being offered?
A: Yes, it is often still feasible to inspect the property being offered. Sellers can continue to exhibit their property until it sells. This makes sense for them since they want to have interested parties ready in case the current agreement breaks through.
Q: Is Under Offer the same as Sold?
A: The simple response is, “No.” However, if you want to buy a home, you must first discover whether it is currently on the market. This is because even if the house is under contract, you can negotiate a purchase price with the seller.
When the property has settled and ownership is passed to the new buyer, it is legally considered “sold.” Once the settlement date has passed and the contract has been properly signed, the new owner can collect the house keys and move into their new home as planned.
Q: Does “under offer” imply “off the market”?
A: Not necessarily. “Under offer” means a potential buyer has expressed interest by making an offer, and the seller is considering it. This is different from “off the market”, which means the seller is no longer accepting offers.
Q: How long does a property stay under offer?
A: The duration can vary, but it typically lasts until all conditions of the offer are met, which can take several weeks.
By understanding these key aspects, you can better navigate the complexities of the real estate market in Australia. Whether buying or selling, knowledge is power and can help you make the best decisions for your situation.
