What Does Under Offer Mean in Real Estate?

When navigating the Australian property market, you may come across the term “under offer,” especially on online real estate listing platforms like realestate.com.au and domain.com.au.

In this article, we’ll explore what under offer means in the context of Australian real estate, how it differs from other terms like “sold” or “under contract,” and what it means for buyers and sellers.

It’s important to note that, while it is easy to understand what under offer means in general terms, there is no industry-wide standard for when properties are labelled this way. If a property you love is listed as under offer, we recommend contacting the selling agent for more information.

Key Takeaways

• Under offer – a buyer has made an offer, and the seller has accepted it, but the sale is still subject to certain conditions.
• Under contract – a contract of sale has been entered into by both the buyer and the seller, and the conditions in the contract have been satisfied. At this point, both the Buyer and the Seller are legally bound to complete the transaction.
• Sold – settlement has occurred and the property has changed hands. All conditions have been met, and the buyer is now the legal owner.

Definition of Under Offer

Under offer is a signal to other potential buyers that the property may soon be off the market but isn’t sold yet. Depending on the circumstances, the sale could still fall through, leaving an opportunity for other buyers to express interest or make an offer.

Talk To The Real Estate Agent

The selling agent of the property will have more information about how the offer is progressing. The property may be going under contract, but the agent may be able to register your interest to alert you to similar properties for sale in the area.

What “Under Offer” Means for Buyers

If you’re a buyer and you see a property listed as under offer, it doesn’t necessarily mean you’ve missed out on your chance to purchase it. Here are a few key points to keep in mind:

1. It’s Not Final

A property under offer is not yet sold. The buyer still needs to meet the conditions of the offer before the sale can proceed to the under contract stage. If the buyer fails to meet these conditions—such as not securing finance or pulling out after a poor inspection report—the deal could fall through, and the property may come back on the market.

2. You Can Still Register Your Interest

If you’re keen on a property that’s under offer, you can still express your interest to the real estate agent. The real estate agent may be able to add you to a register of buyers and let you know when similar properties go on the market in the future.

3. Manage your expectations

If you’re interested in a property that’s under offer, it’s important to manage your expectations. While the sale may fall through, it’s equally possible that the first buyer will meet the conditions and the property will move to under contract status soon.

What Under Offer Means for Sellers

For sellers, having a property under offer is a positive step toward finalising the sale, but it’s not yet guaranteed. Here’s what you should know if your property is under offer:

1. Continue Marketing

Even though your property is under offer, it can still remain on the market until the contract is unconditional. This can be beneficial if the current offer falls through, as it allows you to keep attracting potential buyers and maintain momentum in case another offer is needed.

2. Understand Conditional Offers

Be aware of the conditions attached to the buyer’s offer. If the buyer needs to secure finance or sell their own property, for example, there’s always a risk the sale might not proceed. Work closely with your conveyancer and agent to monitor the buyer’s progress and ensure they are meeting the necessary deadlines.

What Are Contract Conditions?

Conditions in the contract of sale allow the Buyer to terminate the contract if they are not met. Common contract conditions include;

• A finance clause – the contract is subject to the Buyer obtaining satisfactory finance buy the date stipulated in the contract of sale
• A building and pest clause – the contract is subject to the Buyer obtaining a satisfactory building and pest inspection by the date stipulated in the contract of sale. Building and pest inspections are arranged and paid for by the Buyer.
• Cooling off period – the cooling off period applies to most contracts unless it is waived.

Conclusion

In the Australian real estate market, under offer means a property is in the process of being sold but has not yet reached an unconditional contract stage. While an offer has been accepted, the Buyer still needs to meet certain conditions before the sale is finalised. However, there is no industry-wide standard for how the under offer label is used, and it is recommended that you contact the real estate agent for more information.

More Questions?

If you have more questions about the home buying or selling process, our friendly, expert conveyancers can help! Contact us via our contact form or get a custom quote emailed to you.

The above is not legal advice and is general information only.