Can You Make an Offer On a House That Is Under Offer?

What does under offer mean?

Well, one of the most common questions that investors and prospective homeowners ask themselves is whether it is possible to make an offer for a property that is already ‘Under Offer’. First, it is important to understand what ‘Under Offer’ (UO) means. ‘Under Offer’ implies that there is a prospective buyer who has made an offer, which is probably below the asking price, and the seller is deliberating on whether to accept it or not.  For some property agents,’ Under Offer’ means that the property seller has accepted the buyer’s offer. Still, the two parties are yet to finalize the deal via signing the necessary documents. 

When a property is ‘Under Offer’, one can still make an offer to another seller.

At this phase, the property is not yet sold, given that there is pending paperwork. The point when one cannot make an offer is after all the paperwork has been processed and exchanged. Otherwise, the sale is still pending, and there is no concrete agreement in place. Therefore, there is usually a significant chance that the sale of the property listed ‘under offer’ will not materialize. Mainly, about 25% of the deals put ‘Under Offer’ do not go through and therefore, one can make an offer and stand a significant chance of getting the deal completed. 

A listed ‘Under Offer’ property can also be said to be ‘Subject to Contract’, and thus the two phrases can be applied interchangeably. For ‘Under Offer,’ the seller is yet to accept the offer and is considering whether to take it or not. On the other hand, ‘Subject to Offer’ means the seller has accepted a bid from a buyer. Nonetheless, in both cases, the paperwork necessary for completing the deal is yet to be finalized, and thus the property is not yet sold.  If a buyer makes a compelling offer for a property under either of the two, the seller can make a U-turn on the formerly agreed deal and commence negotiating with the new buyer. Therefore, there is still a significant chance of acquiring a property that has been listed ‘Under Offer’ or ‘Subject to Contract.’

What is Gazumping?

The provision of it being possible to make an offer for a property that is ‘Under Offer’ and ‘Subject to Contract’ means that you can easily be gazumped. Gazumping when another buyer’s offer is accepted, and the one who had made a prior offer prompting the property to be ‘Under Offer’ loses the opportunity of closing the deal. Furthermore, if one is gazumped, they might lose a lot on aspects such as the legal fees and surveys depending on the stage of the negotiation. You should avoid being gazumped by ensuring that you are well organized when making an offer. This is mainly by completing all the processes as quickly as possible to eliminate chances of having your offer rejected. Also, maintaining a good relationship with the seller can prove handy in mitigating chances of being gazumped. 

In most typical scenarios, a house does not stay ‘Under Offer’ for long. Often, both the buyer and the seller will be, in most instances, willing to get everything done in the shortest possible time. This is mainly dependent on the preparedness of the buyer, who is expected to fulfil several tasks such as making surveys, deposit funding, and mortgage valuation, among many others. Once all the key details have been finalized, the property ceases to be ‘Under Offer.’

How to make an offer on a house that is Under Offer?

When one intends to make an offer on a house that is ‘Under Offer,’ there several key stages that are imperative for the completion of the deal. First, the buyer should field the offer through a written application. At this stage, the seller can accept or reject it. In some instances, when the seller is interested in engaging a buyer who has made an unconvincing initial offer, the seller sends a counter offer. When an offer is accepted, the two commence on getting the paperwork to complete the deal ready. If the primary offer or the subsequent offer after the counteroffer has been issued is rejected, the buyer can opt to make a new offer or get out of the deal.

Are you a prospective property buyer who’s been wondering, “Can You Make an Offer On a House That Is Under Offer?” If so, then you may consider engaging with a team like ours at Mortimers International for assistance on how to complete the deal as quickly as possible and with total legal compliance. We are a property agency that has been involved in multiple property sales in the UK and abroad since 2001, and so, our experience in the trade can’t be doubted.