What does 'sale agreed' mean when selling a house?
Understanding the meaning of 'sale agreed' and the steps that follow can help buyers and sellers navigate the property transaction process with confidence. This guide explains the meaning of 'sale agreed', the associated legal processes, potential risks, and what buyers and sellers should consider at this stage.
'Sale agreed' means a seller has accepted an offer from a buyer, but the transaction is not yet legally binding. The sale is subject to legal, financial, and structural checks before contracts are exchanged. Understanding this stage helps both buyers and sellers navigate the process with confidence.
What does 'sale agreed' mean?
'Sale agreed' is a real estate term used when a seller has accepted an offer from a buyer, and both parties have agreed on the general terms of the sale. At this stage, the property is considered provisionally sold, subject to legal, financial, and structural checks.
While this is a crucial milestone in a property transaction, the deal is not yet legally binding, meaning either party can still withdraw before contracts are signed.
Frequently asked questions
What does 'sale agreed' mean in Ireland?
In Ireland, 'sale agreed' indicates that a seller has accepted a buyer's offer on a property, and both parties have agreed on the primary terms of the sale. At this stage, the property is considered provisionally sold, pending the completion of legal and financial processes.
Is a 'sale agreed' property legally binding?
No, a 'sale agreed' status is not legally binding in Ireland. The sale becomes legally binding only when formal contracts are signed and exchanged between the buyer and seller. Until then, either party can withdraw from the transaction without legal consequences.
What happens after a property is 'sale agreed'?
Once a property is 'sale agreed', the following steps typically occur:
- Payment of Booking Deposit: The buyer pays a booking deposit to the estate agent, signifying serious intent.
- Solicitor Engagement: Both parties engage solicitors to handle the conveyancing process.
- Property Survey and Valuation: The buyer arranges for surveys to assess the property's condition and value.
- Contract Exchange: After satisfactory checks, contracts are signed and exchanged, making the sale legally binding.
- Completion: Final arrangements are made, funds are transferred, and ownership is officially transferred to the buyer.
How long does it take to move from 'sale agreed' to completion?
The duration from 'sale agreed' to completion varies but typically takes several weeks to a few months. Factors influencing this timeframe include the efficiency of the conveyancing process, the complexity of the transaction, and any unforeseen delays.
Can other offers be considered after a property is 'sale agreed'?
Yes, until contracts are exchanged, the sale is not legally binding. This means the seller can consider other offers, and the buyer can withdraw their offer without penalty. This period carries risks such as gazumping, where a higher offer is accepted from another buyer before the contract exchange.
The stages of 'sale agreed'
In Ireland, the term 'sale agreed' marks a significant milestone in the property buying process, indicating that an offer has been accepted by the seller and both parties have agreed on a price. However, this stage is not legally binding, and several steps must be completed before the sale is finalised.
The buyer typically pays a booking deposit, after which the estate agent issues a sales advice note to the solicitors representing both the buyer and the seller. The legal process then begins, involving contract reviews, property surveys, and mortgage approval if required. Once both parties sign the contracts and the buyer pays a deposit, the sale becomes legally binding. The final stage, known as 'closing' or 'completion', occurs when the balance of the purchase price is paid, and ownership is officially transferred.
1. Acceptance of an offer
The 'sale agreed' process begins when a seller accepts an offer from a prospective buyer. At this point:
- The seller confirms acceptance of the buyer’s offer.
- The property is typically taken off the market.
- The buyer may need to pay a booking deposit (which is usually refundable if the sale does not go ahead).
2. 'Subject to contract'
The transaction progresses 'subject to contract', meaning that the agreement is still conditional on various factors such as legal checks, financing approvals, and property surveys.
During this phase:
- The seller’s solicitor prepares the draft contract.
- The buyer’s solicitor conducts necessary legal checks.
- The buyer arranges a mortgage (if applicable).
- The buyer may commission a property survey or inspection.
3. Legal and financial processes
The 'sale agreed' status triggers the conveyancing process, which involves:
- Property title searches to confirm legal ownership.
- Review of planning permissions and building regulations.
- Checking for any outstanding mortgages or legal issues attached to the property.
- Negotiating any amendments or conditions within the contract.
4. Surveys and inspections
Many buyers arrange for a property survey during the 'sale agreed' phase. A survey helps identify any hidden defects, structural problems, or maintenance issues.
Types of surveys include:
- Mortgage valuation survey: Required by the lender to assess the property’s value.
- Homebuyer’s report: Identifies any significant defects.
- Full structural survey: A comprehensive examination of the property’s condition, recommended for older homes.
5. Expected timeframes
The duration of the 'sale agreed' phase varies depending on factors such as:
- The complexity of the transaction.
- The efficiency of solicitors and estate agents.
- The buyer’s mortgage approval process.
On average, it takes between 6 to 12 weeks from 'sale agreed' to contract exchange and final completion.
Gazumping and gazundering risks
In Ireland, gazumping and gazundering are risks buyers and sellers may face during the property sale process. Since a 'sale agreed' status is not legally binding, either party can back out or renegotiate until contracts are exchanged, making these risks a concern in competitive markets.
- Gazumping: When a seller accepts a higher offer from another buyer after already agreeing to sell to someone else.
- Gazundering: When a buyer lowers their offer just before contract exchange, putting pressure on the seller to accept the reduced price.
These risks can be mitigated by maintaining good communication and progressing swiftly through the legal and financial processes.
Possibility of a back-up offer
While a property is marked as 'sale agreed', some sellers may still accept back-up offers from other interested buyers. This ensures that if the primary buyer pulls out, there is another potential buyer ready to proceed.
Why is 'sale agreed' important?
For sellers, achieving 'sale agreed' status represents progress in the sales process, showing that a serious buyer is ready to proceed. For buyers, it signifies that their offer has been accepted and that they can begin taking the necessary legal and financial steps to secure the property.
However, because the transaction is not legally binding until contracts are exchanged, both parties should:
- Stay in regular contact with their solicitors.
- Ensure all necessary paperwork is completed promptly.
- Be aware of the risks associated with gazumping and gazundering.
- Proceed with property surveys and inspections as soon as possible.
Final thoughts
'Sale agreed' is a key milestone in the property-selling process, but it is not the final step. Buyers and sellers must still navigate legal checks, financial approvals, and potential risks before the sale is completed.
Understanding the meaning of 'sale agreed' and the stages involved can help both parties prepare for a smoother and more efficient property transaction.
If you're looking to sell your property, Estateagent.ie can help you receive offers from up to four estate agents in your area, giving you expert guidance on navigating the 'sale agreed' process and securing the best deal for your home.
