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Sold Subject to Contract: What Does SSTC Mean?

Property Saviour » First Time Buyers » Sold Subject to Contract: What Does SSTC Mean?

Whether you are a motivated buyer or a curious first-time seller, you will have come across the term Sold Subject to Contract or STC written on the for sale board.

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What does Sold Subject to Contract (SSTC) mean?

Sold Subject to Contract (SSTC) means that the owner of the property has verbally accepted an offer made by the buyer.  They have not entered into a contract yet, and the paperwork required to make the contract legally binding hasn’t been completed yet. 

Sold STC is a standard phrase; however, you will also come across Sale Agreed or Offer Accepted.

Under Offer is another frequently used phrase; however, there is a subtle difference between ‘under offer’ and ‘sold subject to contract’, which is that if a property is ‘under offer’, then the seller has received an offer but it hasn’t been accepted. 

Once this or another offer is accepted, then the property will be sold subject to contract.  The reality is that either the buyer or the seller can pull out of a purchase even after a property is marked as SSTC.

What does sold STC mean if you are a seller?

For sellers, this means that property is withdrawn from the market.  When a property is marked as sold subject to contract, it means that your property listing will be labelled as sold on Rightmove, Zoopla and OnTheMarket.  Your property for sale board will also be marked as ‘sold’ or ‘sold STC’.

This means that unless a buyer ticks the box to show ‘sold’ properties on a portal, they won’t see your property listing – and even if they see it, they are unlikely to pursue an enquiry because it has already been sold.

While marking a property as sold subject to contract is largely a tick-box exercise for estate agents, it means they can issue a Memorandum of Sale and the conveyancing process can start.  Both the buyer’s and seller’s solicitor will then start working together to complete the sale.

However, it is never plain sailing from this point onwards as a buyer can change their mind at ANY point for whatever reason – without being liable for your legal fees, moving costs or mortgage payments. 

33% of all agreed sales collapse for various reasons, including a change of mind.

A buyer isn’t committed until he/she has exchanged contracts and put down a non-refundable 10% deposit. 

If you are interested in a sold subject-to-contract property, then it is worth keeping in touch with the estate agent marketing it to see if the sale collapses and find out the reasons behind it. For instance, the property may be unmortgageable, or the buyer couldn’t get a mortgage.

Sold subject to contract sign outside a property
No property is ever 'sold' until payment has been made in full.

What does sold STC mean if you are a buyer?

As a buyer, sold subject to contract means that the seller has trusted you to buy the property in good faith, so please instruct a mortgage surveyor as soon as possible and instruct solicitors so that they can inspect the legal pack, including the property’s title. 

Check with your lender if they would accept search indemnity insurance; this will save you a few quid as well as time, and the seller will appreciate your ability to move quickly.

Let’s be honest: you are unlikely to read searches.  Your solicitor will throw them at you, usually, and expect you to go through them for the first time without knowing what you are looking for!  Or he/she can ‘forget’ to inform you of the huge liability to the local Parish church’s roof due next year! 

Search indemnity cover should pay for that but only if you buy it before you instruct searches.  Once you’ve instructed the searches then it is YOUR responsibility to check for these liabilities or issues.

If you have instructed a lethargic solicitor, you risk losing your dream home to a cash buyer who can buy it quickly – and potentially for less.  Sellers prefer certainty and speed, and nobody likes waiting around forever. 

Of course, there is a risk that an adverse survey could highlight problems with the property but if it’s all clear, you should ensure that any enquiries are answered promptly by the seller’s solicitors so that you can move on.

You want to be 100% clear that property is a good security with no issues with its future saleability before you are financially committed to handing over hundreds of thousands of pounds.  But equally, you don’t want to drag your feet.

If your solicitor has told you, let’s wait for the surveyor to come back all OK then we will ask for the contract pack, spend two weeks ‘inspecting it’ then write a letter to the seller’s solicitors with queries and when all responses are OK, we will instruct searches then it could take several months.

In the current market, the best-case scenario is that your conveyancing process will take around 4 months.

The length of time conveyancing can take can be frustrating for the seller, their buyer and the estate agent.  Ensuring that both parties instruct great solicitors and keeping them updated, will help the sale go ahead.

Can other buyers still make an offer on a property that is sold STC?

Unfortunately, they can.  Estate agents are obliged to pass on all offers, as they are acting in the seller’s best interests.  This perfectly legal but morally questionable practice is called gazumping.  It is extremely unfair for the buyer, although the seller may be rewarded for their patience, and the conveyancing process restarts from the beginning.

If the property remains on the market, the agent’s website and there’s a big board advertising it, then there’s nothing to stop any interested party from getting in touch and making a higher offer at a late stage. 

A good estate agent will keep their details on file in case the buyer changes his mind.  If a seller feels they are being messed around, there’s little to no communication then he/she may be tempted to accept a higher offer – which could be tens of thousands of pounds more.

Can a property sold subject to contract can still fall through?

Regrettably, again, the answer is a yes.

Should a seller wish to accept a higher offer from a new buyer, then the current buyer is helpless.  Not only this will be emotionally and financially draining, but the buyer will also have to start their search process again. 

To avoid this risk, buyers should look to indemnify searches and aim to exchange contracts as quickly as practically possible.

What is the point of stating that a property is sold STC, then?

It is a great question given that the conveyancing process isn’t legally binding thus leaving buyers vulnerable to being gazumped. 

The likelihood of buyers being gazumped is higher when the property market is on the up, as fear of missing out means potential buyers will pay over the asking prices.

Until the exchange of contract, both parties are committed to a sale.  While labelling a property as ‘sold’ gives a buyer a fair chance to get their affairs in order, it needs regulating so that both parties enter a legally binding contract.

Nothing is ever sold until you have been paid for it.  A sale may have been agreed in principle but that’s it.  To avoid gazumping, a buyer should offer to pay a non-refundable deposit and request that the property be withdrawn from the market.  The buyer then has 12 weeks to exchange and complete, which is a generous timeframe to raise a mortgage, get searches indemnified and complete the purchase.  This shows a goodwill gesture to the seller and shows a firm commitment.

Equally, a buyer can reduce their offer after an unfavourable survey picks up issues with the property.  This process is called gazundering and happens often when the housing market is flat or there’s a recession.

In the ‘We Buy Any House industry‘, we see gazundering all the time.  If you are dealing with a genuine cash house buyer, then he/she will be able to complete the purchase within a couple of weeks.

Can I really sell my house quickly?

Yes of course you can. We will work with you to achieve a faster sale of your property. Using our expedited Exchange of Contract service, you can have money in your bank in as little as 10 days.

Interested? Submit your postcode and receive a quick cash offer for your property now.

One of our experienced buyers will contact you to guide you through the process. We will not ring you at work and will only call you at a time that you have agreed. We are very discrete and understand that people have busy lives.

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