When a property goes under offer, it means a buyer has made an offer that the seller has accepted, but the sale hasn’t been finalised yet. This stage marks a critical transition in the property buying process where both parties work towards settlement.
Understanding this phase helps you navigate the property market with confidence. Whether you’re a buyer or seller, knowing what to expect can prevent costly mistakes.
The under offer period involves several key steps that must be completed before ownership officially changes hands. According to the NSW Government’s property buying guide, this stage requires careful attention to legal and financial obligations.
What Does “Under Offer” Actually Mean?
Under offer status indicates a seller has verbally or formally accepted a buyer’s offer. The property isn’t sold yet, and the agreement isn’t legally binding until contracts are exchanged.
During this time, the property typically remains on the market. Other buyers can still make offers, though most real estate agents will indicate the property’s under offer status in listings.
The key difference between under offer and under contract is legal commitment. Under contract means both parties have signed and exchanged contracts, creating a legally binding agreement.
The Timeline from Under Offer to Settlement
Most properties stay under offer for two to six weeks. This period allows buyers to complete due diligence and arrange finance.
The timeline varies based on several factors. These include building and pest inspections, finance approval, and contract negotiations.
Some sales move faster when buyers have pre-approved finance and waive certain conditions. Others take longer if complications arise during inspections or legal reviews.
What Happens During the Under Offer Period?
The buyer conducts building and pest inspections to identify structural issues or damage. These inspections protect buyers from unexpected repair costs after settlement.
Finance arrangements must be finalised during this stage. Lenders require property valuations and complete documentation before approving loans.
Legal representatives review contracts and conduct property searches. Solicitors check for easements, zoning restrictions, and other legal matters that might affect the property.
Buyers and sellers negotiate any issues discovered during inspections. Price adjustments or repair agreements often result from these discussions.
Can a Seller Accept Other Offers?
Sellers can legally accept other offers until contracts are exchanged. This practice, known as gazumping, occurs when a seller accepts a higher offer after agreeing to an initial offer.
Consumer Affairs Victoria notes that while gazumping is legal in most Australian states, it’s considered poor practice and can damage a seller’s reputation.
Buyers can protect themselves by moving quickly through the under offer stage. Exchanging contracts as soon as possible reduces the risk of losing the property.
What Are Cooling-Off Periods?
Most Australian states provide cooling-off periods after contracts are exchanged. These periods give buyers time to reconsider their purchase without penalty or with minimal penalty.
Cooling-off periods vary by state. NSW offers five business days, while Victoria provides three business days.
Buyers who purchase at auction or waive the cooling-off period don’t receive this protection. Understanding your rights before signing contracts is essential.
Can Buyers or Sellers Back Out?
Before exchanging contracts, either party can withdraw without legal consequences. Buyers lose their holding deposit if they withdraw after exchange, unless specific conditions aren’t met.
Common conditions that allow withdrawal include failed building inspections, finance rejection, or unsatisfactory legal searches. These conditions must be clearly stated in the contract.
The Queensland Government’s property guide explains that once contracts are unconditional, backing out results in significant financial penalties and potential legal action.
Tips for Buyers During the Under Offer Stage
Act quickly to secure the property. Complete inspections and arrange finance approval as soon as possible.
Maintain open communication with your solicitor and real estate agent. Regular updates help identify and resolve issues early.
Read all documents carefully before signing. Don’t skip the fine print or rush through legal paperwork.
Keep your finance pre-approval current. Lenders may reassess your application if your financial situation changes.
Tips for Sellers Managing Under Offer Properties
Continue marketing your property until contracts are exchanged. This approach protects you if the current deal falls through.
Respond promptly to buyer requests for information or repairs. Delays can cause buyers to reconsider their offer.
Work closely with your agent to manage competing offers professionally. Transparent communication maintains your reputation in the market.
Understanding When a Property Goes Under Offer Protects Your Interests
When a property goes under offer, both buyers and sellers enter a crucial negotiation phase that requires careful management. This period determines whether the sale proceeds smoothly or falls apart.
Knowledge of your rights and obligations during this stage prevents costly mistakes and legal disputes. Working with experienced professionals including solicitors, building inspectors, and real estate agents ensures you meet all requirements.
Domain’s property insights provide additional resources for navigating property transactions. For more guidance on property settlements, check out this helpful article on seen.com.au.
FAQs
1. How long does a property stay under offer?
Properties typically remain under offer for two to six weeks, though some transactions complete faster or slower depending on finance approval, inspection results, and negotiation complexity. Simple transactions with pre-approved buyers may settle within two weeks.
2. What’s the difference between under offer and sold?
Under offer means a seller has accepted an offer but contracts haven’t been exchanged yet. Sold indicates the settlement has completed and ownership has officially transferred to the buyer with all money exchanged.
3. Can I still inspect a property that’s under offer?
Yes, you can usually still inspect properties under offer and submit your own offer. Real estate agents often continue showing properties until contracts are exchanged, as initial deals sometimes fall through.
4. Do I need to pay a deposit when a property goes under offer?
You typically pay a small holding deposit when your offer is accepted, usually between $1,000 and $5,000. The main deposit, usually 10% of the purchase price, is paid when contracts are exchanged.
5. What happens if building inspections reveal major problems?
If inspections uncover significant issues, you can negotiate a price reduction, request repairs, or withdraw your offer if your contract includes an inspection condition. Most buyers include these conditions to protect themselves from unexpected costs.