A question we are sometimes asked by our clients selling their properties in Leith and Edinburgh is just that, “when my property is ‘Under Offer’, does that mean my property is sold?
The simple answer is no. But as with all things relating to the law, it is never that simple and so this article will explain in a little more detail what it means when your property is marked as under offer.
This is all explained best by looking at a typical example:
So, we have been marketing your 2 bedroom apartment in Leith for sale. It has a market value of £180,000 and we have marketed it at offers over £175,000. There have been multiple buyers interested in your property and so before very long we have set a closing date. Five offers have been received and you have decided to accept the highest offer of £205,000 with a Date of Entry of 27 January 2017.
At this point, we put your property as Under Offer on theÂ ESPC, Zoopla and so on. The main purpose of putting your property as Under Offer at this stage is to give notice to the public that you have verbally accepted an offer and that no further viewings will be permitted.
Now, the offer that has been verbally accepted at this stage contains a condition that the buyer’s offer is subject to survey. This means that the buyer’s offer is subject to the buyer getting their mortgage. So although, in the property profession we refer to the condition as the subject to survey clause, it has little to do with surveys but more to do with allowing time for the buyer to get their mortgage arranged.
But surely, you will ask, the buyer will already have their mortgage arranged?
No, although almost all buyers will have a mortgage agreement in principle from their lender, the lender will only go to the next stage of getting the buyer to complete the detailed mortgage application once the buyer has offered successfully.
So how long does that take?
Some lenders can complete the mortgage application process quite quickly and other lenders can take some time. The average time is about four to five weeks. But that means that although your property is under offer, the Missives (the Sale Contract) will only be progressed and a legally binding contract achieved once the buyer has received their mortgage offer.
At the point where there is a legally binding contract between you, the seller, and the buyer, will your property be considered as sold which can be many weeks after the offer has been verbally accepted and your property marked as â€œunder offerâ€.
Back to our example: You want to buy a new home.
Do you have to wait until there is a legally binding contract for the sale of your Edinburgh property before you start looking for and offering for your new home?
No. Once your property is under offer, you can view and offer for properties. We shall make sure that the offer you make will also be subject to survey (if you need a mortgage) and will be subject to the Missives for the sale of your current home being concluded and legally binding.