One term you might see or hear when searching for real estate is “under offer.” It means that a deal is being hammered out. But if you think the opportunity is good enough, don’t let the phrase turn you away!
One of the secrets of successful property investing is interpreting the real meaning of realtor-speak. If you can understand what they’re saying, you can see when a good flipping opportunity is really off the market.
What Does It Mean?
“Under offer” is a term used by real estate agents indicating a buyer has made an offer to the seller and that they accepted. When new property investors hear these words come out of an agent’s mouth, they often balk, thinking that the house is already spoken for by a buyer.
Other phrases you’ll often hear in Ontario include “conditional offer” or “contingent upon”. But while these words mean that the seller has accepted an offer, it’s not sold. Typically the offer was below the asking price. As a way of committing and showing that they are financially capable of following through on the deal, buyers have to offer a deposit. However, the seller is under no legal obligation to accept the deal until they’ve signed an Agreement of Purchase and Sale.
The deal isn’t complete until all conditions that are part of the offer have either been fulfilled or waived by their respective expiry dates. In the meantime, the seller can still legally look at other offers. So if you see a “conditional” offer on a property that’s still on the market, there’s a chance!
Can I Make An Offer On A House That Already Has One?
If the seller thinks that the offer is good enough and accepts it, the two parties sign an Agreement of Purchase and Sale. The buyer agrees to purchase the property for a certain price if the seller satisfies the terms and conditions.
When a buyer makes an offer, it is irrevocable for a certain amount of time. Once the offer is accepted, the buyer must submit the deposit in the form of a certified cheque or money order within 24 hours of offer acceptance.
This means that if you see words like “under offer” on a website or hear the words in a discussion with a local realtor, you still have time to make a counteroffer! The official paperwork has not been signed, and you can still talk to the agent about making an offer. If you see a good opportunity, talk to the agent!
