So you’ve spotted a house you really like, and it ticks all the boxes. But there is just one problem. According to the agent (or the listing on Rightmove or Zoopla), the house is listed as “under offer”.
Don’t worry, there is still hope. Even though it is close to be off the market, it is not yet sold. In fact, you can always make an offer on an “under offer” (or even “sold STC”) property.
In this article, we’ll take a closer look at what happens at this point in the home buying process and explain why you still have a chance.
What does it mean when a property is “under offer”?
If a property is “under offer”, it usually means that the seller has received an offer from a buyer and is considering it. It may be that the offer is lower than the asking price or that the seller has received several offers from a few potential buyers at once and is taking his time choosing between interested parties.
However, some agents will use “under offer” when an offer has been accepted, but before any contract has been exchanged. This means that the sale of the property is not yet legally finalized.
What is the difference between “under offer” and “sold STC”?
If you see a property labeled “sold under contract”, “sold STC” or “SSTC”, it usually means that the seller has received and accepted an offer from a buyer.
At this point in the home buying process, the potential buyer will apply for their mortgage and complete assignment inquiries and verifications. A lot can go wrong at this point, causing the sale of the home to fail, so the property may even come back on the market.
Sometimes these two terms are used interchangeably, so it’s worth checking to see if an offer has actually been accepted so you know exactly what’s going on.
Can you view and bid on a property that is “under offer” or “sold STC”?
Yes you can! Interested buyers can still make an offer on an “under offer” or “sold STC” property.
This is because the sale of the home is not legally binding until the buyer’s attorney and the seller’s attorney – both called conveyancing attorneys – have formally reviewed and accepted signed contracts. identical. Once this is done, the buyer pays their deposit, the mortgage money is released by the lender and the sale is finalized.
Until that happens? The house is technically still up for grabs!
Making a better offer after another buyer has had theirs accepted is called gazumping. It’s totally legal, although perhaps a bit unethical. The buyer who gets tricked will certainly not be happy, because he will miss a property he loved and will have to pay the bill for the non-reimbursable mortgage, the survey and the lawyer’s fees.
But, ultimately, there’s not much they can do about it. You can request house viewings in the usual way, even if the properties are listed as Under Offer or SSTC. And if you like what you see enough to make an offer, the agent is obligated to forward any new offers to the seller.
You may find that your (higher) offer is more tempting to the seller, but you don’t always have to go higher. You can simply match the existing offer, but demonstrate that you can act faster (because you are a cash buyer or not part of a real estate chain). If the seller wants a quick sale and the first bidder is dragging their feet, you could outsell them and win.
Note: if it is your offer that is “under bid” or “sold STC”, it is a good idea to ask the seller to remove the property from the market to reduce the risk of gazumping. They don’t have to, so establishing a good relationship with them as early as possible will help here. You’ll also want to move the home sale forward quickly to avoid last-minute rivals, so make sure you have your mortgage paperwork in order.
How long can a property be “under offer”?
There is no limit to how long a property can be “under offer”. It all depends on how long the seller takes to accept the offer in question.
Then both parties will need to go through the rest of the home buying process before the exchange of contracts can take place. Often weeks or months can pass between submitting the offer and finalizing the purchase. As we said, it is only after this step that the house is officially taken off the market.
The time frame for buying a home can vary depending on a number of factors. If the process goes smoothly, it could only take three months, or even up to six if things get stuck. That’s plenty of time for a new buyer to squeeze in a higher offer on a property that is “under offer” or “sold under contract.”
Read more: How long does it take to buy a house?
Why is gazumping less common in Scotland?
Gazumping is far less common in Scotland, simply because all property purchases are handled by estate agents who are bound by strict rules. Law Society of Scotland rules.
Once an offer has been formally submitted by Buyer’s Counsel and accepted by Seller’s Counsel, Seller’s Counsel can not accept other offers. If the seller wishes to explore another offer, he will have to find a completely new lawyer to do so.
So you box make an offer on a property that has already had an accepted offer in Scotland. But you will have a harder time convincing the seller, because he will have to consider that it is worth (and the expense) to drop his lawyer.
Read more: How long does it take to buy a house in Scotland?
Whether you’re a buyer considering making an offer on a property or worried about getting caught out, Habito’s comprehensive home buying service can help. We’ll walk you through everything and let you track progress on your own personalized dashboard.
Learn more here.