Buying a house can be an exciting yet challenging experience, especially for first-time homebuyers. One of the key stages in the home buying process is when a property goes “under offer”. But what does under offer mean? What happens during this stage, and what are the subsequent steps in the process? Let’s take a look.
What does under offer mean?
A property is considered “under offer” when the seller has accepted an offer from a potential buyer but the transaction has not yet been legally completed.
At this point, the buyer and seller have agreed on a price. It’s important to note that while the term “under offer” implies that the property is off the market, it is not a legally binding agreement. Either party can still back out of the deal without any legal consequences until contracts are exchanged.
What happens when a property goes ‘Under Offer’?
Mortgage application and valuation
If you’re buying with a mortgage, then you should already have a mortgage agreement in principle. Once you go under offer the mortgage lender will require further information about the property and your finances. Your mortgage adviser will be able to assist you with this process.
They will conduct a mortgage valuation to ensure the property is worth the agreed price.
Surveys and inspections
Once the property is under offer, its recommended you book a survey on the property, particularly if it an older property.
A survey identifies any potential problems or repairs needed and can help you make know exactly what you’re buying.
There are several types of surveys, including the HomeBuyer Report and the more in-depth Building Survey. In addition to a survey, some buyers may choose to have additional inspections carried out, such as electrical, plumbing, or damp checks.
The conveyancing process involves the legal transfer of ownership from the seller to the buyer.
Conveyancers undertake various tasks, including local property searches, drafting and reviewing contracts, and liaising with your mortgage lender or broker.
They will also help you understand your legal obligations and ensure that all necessary documentation is in order.
What Happens Next?
Exchange of contracts
Once all the necessary checks, surveys, and searches have been completed and both sides are satisfied with the terms of the sale, the conveyancers will exchange contracts.
At this point, the agreement becomes legally binding, and neither party can back out without facing financial penalties.
Completion is the final stage in the home buying process, where the outstanding balance of the purchase price is transferred to the seller, and the buyer takes legal possession of the property.
The conveyancers will arrange the transfer of funds, and the keys will be handed over to the new owner.
The completion date is usually agreed upon during the exchange of contracts and can be anywhere from a few days to several weeks after the exchange.
Under offer to completion
Understanding the “under offer” stage and what happens next is really important in the home buying process.
There are lots of moving parts and you need to be organised with excellent communication.
Being aware of the steps involved, will help reduce stress and ensure a smoother transaction.
By staying informed and working closely with your conveyancer, you can navigate the complexities of buying and successfully completing your home purchase.
Need more advice?
We know that the home-buying process can be difficult and uncertain. Regardless of whether you’ve done this before, we can help you get your dream home with minimal hassle or fuss. Find more of our advice for buying a property here.
You can also pick up our advice on our YouTube channel and on the Move iQ Property Podcast – available across all podcast app’s.
Last Updated: September 25th, 2023