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Buyer
What does 'under offer' mean when buying a property?
A property is under offer – but is it sold? Learn what the term means, whether you can still make an offer and what happens next.
Buying or selling a property is one of the biggest financial decisions many people will make. Unfortunately, real estate comes with lots of buzzwords, which can make it an even more stressful time.
One of the terms that people can find the most confusing is 'under offer'. A property listed as under offer has received an offer that the seller has accepted, but the sale is not yet final.
Here’s what under offer means for buyers and sellers, how it differs from under contract, and whether you can still make an offer.
More: The questions you must ask when buying property in Victoria
Quick answer: What does under offer mean?
A property is generally described as 'under offer' when the seller has accepted a buyer's offer, a contract has been signed but the sale has not yet been completed or that a viable offer has been received and is likely to be accepted.
Often, there are conditions attached to the contract, such as finance approval or a satisfactory building or pest inspection.
Once the conditions are met, there is a legal commitment on both sides.
The Real Estate Institute of Victoria says that 'under offer' is an industry description rather than a legislated term in a property transaction in Victoria. Its precise meaning can therefore depend on the agent and the status of the contract.
More: What happens on settlement day when buying a house in Australia?
Under offer vs conditional, unconditional and sold
| Status | ||
|---|---|---|
|
Under offer |
A buyer has made an offer on a property. The seller has accepted or is highly likely to accept the offer. Both parties may have signed a contract. |
The sale may still depend on conditions such as approval of finance, a building inspection, the sale of another property, or vacant possession of a property that has a tenant living in it. There is a legal commitment on both sides to continue the sale if the conditions are met. |
|
Conditional |
The agreement is subject to specified conditions. |
This is very similar to 'under offer'. Both parties have signed the contract and there is a legal commitment to go through with the sale unless a condition is not met. |
|
Unconditional |
The contract has no outstanding conditions. Generally, neither party can back out of the deal. |
Straightforward and immediate. All the terms and conditions have been satisfied. Everybody is bound to settle on the agreed date. |
|
Sold |
The property is no longer available. The sale is finalised at settlement when all checks have been made, the title and transfer documents exchanged, and the balance of the purchase price is paid. |
The contract of sale is signed by buyer and seller, any cooling-off period has passed, and all contract conditions have been met. Private residential buyers in Victoria have a 3-business-day cooling-off period (unless bought at auction or within 3 days before/after an auction). |
'Under offer' means that a buyer has made an offer on a property. Image: Getty
Can you still make an offer on a property that is under offer?
Potential buyers who see 'under offer' labels on a listing tend to think a deal is done.
Most often, this is the case, and the parties are just waiting for finance to be approved or a satisfactory building or pest inspection. Real estate agents are unlikely to take other potential buyers through a property that is under offer.
However, it is worth asking the agent:
- Has a contract been signed?
- Are there outstanding conditions?
- Are inspections or other offers still being accepted?
More: Conveyancing explained - a home buyer's guide
What does 'under offer' mean for a seller?
A seller who has signed a contract accepting an offer needs to meet agreed obligations (such as a building inspection) and wait for any conditions to be resolved.
Real estate agents are unlikely to keep holding inspections while there is a signed conditional contract.
Why might an under-offer property return to the market?
There are several reasons an 'under offer' property might return to the market, including:
- Finance not approved to the buyer by the required date
- A mortgage lender valuing the property below the contract price
- A buyer's other property not selling or settling in time
- A building or pest inspection leading to negotiation or withdrawal
- A tenanted property unable to be vacated in time
- Disagreements over repair costs
- Another contractual condition not being met
- The buyer or vendor not completing a required step during the required timeframe.
Buyers should always obtain independent legal or conveyancing advice about their own contract and rights. A good place to start is the due diligence checklist from Consumer Affairs Victoria.
More: Section 32 explained - what home buyers in Victoria need to know
You are unlikely to be able to make an offer on a property that's already under offer.
What should a buyer do if a property is under offer?
If a property is under offer, ask the real estate agent about the situation to understand the status of the offer. You can also:
- Find out whether inspections and further offers are still being accepted.
- Have finance preparation and professional advice in place in case you can make an offer
- Decide on a firm budget (and don't go over it).
- Continue considering other suitable properties.
More: How to choose a real estate agent
Key takeaway
'Under offer' does not always mean the sale is complete, but another buyer's options may be limited.
The Real Estate Institute of Victoria General Manager Policy & Professional Practice, Sarika Bhalla, says that buyers should always seek legal and conveyancing advice when considering making an offer on a property.
"People should also aim to have their finance approved – this can mean the difference between losing or winning a property as many sellers prefer unconditional offers," she said.
'Under offer' does not mean that a property sale is complete.
Frequently asked questions about the term 'under offer'
Not necessarily. It means an offer has been made, a seller has accepted, and a contract has been signed. If the deal falls through, the property may remain on the market, or the seller may be open to offers made by other buyers.
This depends on the contract, its conditions, and the agreed deadlines.
No, a seller cannot accept another offer if there is a signed conditional contract in place.
Yes, an under-offer property can fall through. There are several reasons an under-offer property might return to the market, including issues with finance, property value, building and pest inspections, unmet contractual conditions, and so on.
Buyers should always obtain independent legal or conveyancing advice about their own contract and rights. A good place to start is the due diligence checklist from Consumer Affairs Victoria.
A 'back-up offer' is not a legal term, but is used by some agents to describe a discussion with a potential buyer.
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
