Among the inquiries most frequently asked by house-hunters is: what is the difference between “under offer” and “sold subject to contract”?
They often see both terms applied to properties and assume, quite reasonably, that they must mean different things. However, and confusingly, they mean almost the same thing. The difference typically depends on which estate agent is handling the sale and their preferred terminology.
In theory, a property could be described as “under offer” if an offer had been made on it but declined by the seller.
However, most agents would likely not use the term “under offer” in such circumstances. Among other reasons, the seller might object as it could discourage potential buyers.
Instead, the expression “under offer” generally becomes relevant only when an offer has been accepted by the seller, whether or not it is for the full asking price.
At this point, the property is considered to be under offer and can legitimately be described as such—whether on the estate agent’s board or on property websites.
In recent years, it has become common to see the alternative expression “sold subject to contract.” In practice, this simply means that an offer has been accepted on the property, but contracts have not yet been exchanged.
There is often a time lag, sometimes lasting several months, during which surveys are conducted, mortgages are approved, and other steps are completed. This is also when sales can fall through, potentially due to issues such as structural problems uncovered by a survey.
So, can you make an offer on a property that is under offer? Many buyers insist that once their offer on a property has been accepted, the term “sold subject to contract” should be used to describe the property.
It is their way of saying, “Hands off!” Many estate agents will typically stop showing the property to other prospective buyers at this point. However, the situation is far from straightforward.
The practice of gazumping—where a new buyer submits a higher offer on a property that is already under offer—is not as common as it once was but still occurs relatively frequently.
If you’re interested in a particular property and see that it is “under offer” or “sold subject to contract,” you should not assume that it has been permanently removed from the market. That point is only reached when contracts have been exchanged.
“As a buyer, you can reduce the risk of gazumping by asking the seller to take the property off the market as soon as they accept your offer, building a good relationship with them, and working quickly to exchange contracts,” advises an expert.
“It may also be worth checking whether the seller’s agent has a policy on gazumping, which might require the seller to decline any new offers after the initial acceptance.”
The dos and don’ts surrounding gazumping are notoriously unclear. A question that frequently arises is: can you make an offer on a property that is under offer or sold subject to contract?
The straightforward answer is yes. Even if the property is already under offer, the agent is legally obliged to pass on your offer to the seller. After that, it is up to the seller to decide.
“If sellers feel uneasy that the deal they’ve already accepted is at risk—for instance, due to a poor survey—it is natural for them to be open, at least in theory, to other offers. This is especially true if new offers exceed the original asking price.”