What exactly does sold subject to contract mean? If you are a seller, you may want to know whether the buyer is in a position to pay for the negotiated money for the property transfer to complete the agreement or not, so you need to get all the legal documents to finalise the deal.
If your house is marked sold subject to contract by the website, it represents an offer has been made against the property, and the seller has accepted it, but the sale is not yet legally binding though it is "subject to contract".
If you are a seller, you need to accept the bid from a buyer, and then the buyer needs to have their proof of funds confirmed; only then the property listing is marked as SSTC. Sometimes sales are "agreed upon" or "under offer," and estate agents use certain terms to indicate the transition phase.
For a buyer, SSTC status means they get some time to conduct surveys and searches to ensure everything is as it should be with the property.
In the UK and Scotland, once the parties agree upon it, they can move forward, hire a solicitor and complete the related legal procedures. SSTC is common in England and Wales, but Sold STC does not exist in Scotland. The contract is legally binding once both parties have agreed upon the offer.
In England and Wales, the property may fall through and come back on the market if the buyer fails to get funds for the transaction, if there are disagreements over some issues, or if there are flaws in the property that was not informed earlier by the seller.
Moreover, such a verbal agreement may fall through even when the buyer is in a chain - where he has to sell his property to buy a new one or if they are a cash buyer.
So, what does sold subject to contract mean if the property needs restoration work?
A good example of what sold subject to contract means in conditions when the seller is asked to do renovation work before the sale by the buyer; in such a case, the property is in damaged conditions or is not fit for living, and the seller may have to work on the property to make it livable; at the same time, the buyer gets some time to compare similar properties in the neighbourhood to estimate the price, and it can help them to renegotiate with the seller.
What is STC?
Sold subject to contract is noted against the properties on the website listings for the properties where the seller has accepted a bid, though the sale process is not yet completed.
Although such properties may be available for other bidders, those marked as SSTC means other buyers cannot negotiate or seek permission to see the property. So once the property is listed as SSTC, making a higher offer to push the buyer out of the deal is called "gazumping", and in certain cases, it is not permitted.
If you have found a perfect home, but it is categorised as Sold STC, you may have lost the first bid, but all is not lost as it shows the buyer and seller agreed on a price; however, the final contract that would make the deal irreversible has not been made, so if you are still interested you can ask your property agent to try to find out the latest status of the sale process.
If the terms of sale are agreed upon, it is listed as SSTC, but a lot of work is required from both sides before the deal is finalised. Usually, the buyer will have to arrange for a building survey, he needs to get the mortgage finalised, and their solicitors need to agree on the contract terms to ensure there are no legal issues or debts once the property is sold. There are no problems related to planning, flooding or other equipment.
The seller needs to explain some of the questions asked by the solicitors of the buyer, who in turn need to deal with settling a mortgage and debts.
In general, if a property is listed as SSTC, it is not considered ideal to buy or bid for, but many sellers will like to get bids from new buyers to get a higher price than they have already agreed to.
The seller may also seek bidders alternatively if the buyer is taking a long time to get a mortgage or if they suspect the buyer is not in a position to get a mortgage. Since most listing agents may advertise the property under SSTC, they keep a list of interested buyers who can contact if the sale does not proceed for any reason.
The seller may even pay the agents to know the current position of the deal and may seek bidders for the property that is SSTC.
The seller or buyer may change their minds before the sale is completed and agree to newly negotiated terms.
If you are a seller, the property will be removed from the market once it is marked SSTC. It will be listed as Sold STC on the agent's website and property portals. However, it doesn't completely remove the listing, as prospective buyers can still put in competitive offers.
What Is STC Meaning?
STC - subject to contract is the term used for the condition where the buyer accepts the offer that comprises the fee and other details, but the actual transaction agreement has not been made.
Such deals may be just verbal agreements and may not give the buyer or seller legal rights. SSTC means that your solicitor has not completed the process of submitting the legal papers for the buyer. They may need to carry out a house survey and conduct conveyancing searches. Once these tasks have been accomplished, the purchase will be ready to be finalised.
Again, Sold STC is not considered "unbound" in Scotland as the contract is legally binding once the offer has been accepted. However, there is no set time for how long it will take. It depends on the conveyancing process and the completion of the memorandum of sale when the buyer needs to get the mortgage approvals and arrange for funds. They will also need a reliable property surveyor to inspect the home.
Other buyers may use the time opportunity to seek more details about the property. Some may even make an alternative offer to the seller and negotiate better. Of course, there are also instances when the transactions fail, meaning that the property is available.
What Does SSTC Mean To Estate Agents?
What does SSTC mean for estate agents? It is usually after going through the bidding and bartering stage. Many brokers will use SSTC to indicate the listings' transition status where nothing is legally binding. You can find out more about SSTC by contacting a professional estate agent.
What Does SSTC Mean When Selling A House?
If you are not selling and then buying a new home using the funds of a previous home sale, which means, if you do not have a chain sale, the house will sell quickly as some sellers may choose to sell only to buyers who are not in a chain to speed up the process of the sale.
Another option is to sell the house to an investor who can agree on a sale with you and proceed to buy without waiting for another purchase or sale.
It is important to provide the best possible information related to the property to the buyers to avoid last-minute confusion, and it has been found homes which are clean and in proper condition may get buyers quickly.
Also, you should advertise your house to target the right audience; if you want to sell to professionals, young families, or businesses, you must highlight the amenities and features to the interested people.
It is advised to sell to a buyer prepared with pre-approval for mortgages and other legal documents. Cash buyers may be able to pay immediately for the deal, and even the first-time buyer may finalise the agreement quickly as they may not be involved in a property chain.
If you are a buyer searching for a house or a seller who wants to sell quickly, you should know that those recorded as SSTC or STC indicate a buyer made an offer against them, which the seller has accepted. However, the agreement can be unwritten, which means the sale is not legally binding.
If trying to sell your home, you have rights over the property until you legally exchange contracts with the buyer.
Some STC houses may be listed as contingent by the website listing, as the transaction process may depend on multiple other factors. STC can be listed as "under offer" by some property sites. Though it shows a transition phase, deterring other potential buyers from making an offer, it does not ensure the deal may not fall through.
What's The Difference Between Under-Offer And SSTC?
SSTC is the circumstance where the seller agrees to sell the house to a buyer, and their proof of funds has been established. The contract will be made once both parties meet the legal requirements.
Soon most websites will mark the property as SSTC, which means the buyers can make no more bids on the property. However, in the case of an under offer, the seller is still considering the offers from different buyers, and no verbal or legal contract is made.
The final exchange of contract happens when both parties agree to all the terms and conditions, and after the agreement, it becomes legally binding.
If your conveyancing solicitor has been working on the contract, in that case, they need to cover all the essential legal issues, as the buyer agreed to the offer and its terms, the seller is aware of the relevant law, the lender and the buyer have carried out the surveys and valuation, the searches are completed by the conveyance and the funding for the deposit is in place, the EPC is checked, and the data to finalise the agreement has been agreed upon by the involved solicitors.
If the insurance is in place and if both parties have read all the contract terms and understood the relevant conditions before they agree to sign the contract, they can proceed to conclude it.
The exchange of contracts and completion of the deal may take up to four weeks or more, depending on various factors. However, it is not advised to complete in a day or two, as it can expose the buyer to all sorts of potential issues as they prepare to move into the house without knowing much about its conditions. In addition, some lenders may not approve the mortgage before five working days.
So you need to check everything to sign the contract, pay the deposit to your solicitor, instruct the solicitor to exchange contracts, prepare to complete the transaction, ensure the lender makes the final checks, the fund is released, and the seller confirms the receipt of funds before handing over the keys.
Can I Make An Offer On A House That Is SSTC?
Typically the homeowner is not allowed to accept bids from other buyers if the property is listed as SSTC. When a buyer submits an offer letter to buy, a clause prevents the homeowner from cancelling the sale even if a better offer comes in.
If the buyer does not have the funds they had agreed on due to a job loss or simply a web of lies, the seller fails to get bids from other interested parties and may have to relist the property on sites. SSTC is not legally binding, and almost 15 per cent of the properties are relisted on the market.
There are situations where the house tagged as SSTC acquires a higher bid, and the house owner accepts it; though it is not considered appropriate, it may happen.
Gazumping can happen during the SSTC stage because another buyer may give a higher offer to tempt the seller. This is possible as no legally binding contracts have been signed or exchanged.
Buyers can avoid gazumping by trying to get a legal agreement with the seller in writing that states that the seller will not accept any more viewings, which can prevent the sale from falling through.
Gazumping is not the most suitable option, and it is one of the biggest fears of house hunters because when someone has accepted an offer, they are likely to spend on surveys or hiring a solicitor. In addition, the more time passes after a buyer has accepted an offer, the more expensive they are likely to incur. So, when you gazump, you most likely cost them financially.
Sellers are not always keen on opting for gazumping, but if you are a buyer, you should ask the seller to take off the property from the listing once your offer has been accepted. If the property is no longer advertised, there may be fewer chances of getting a higher offer.
Once contracts are exchanged, the agreement is legally binding, and as a buyer, you may want to get to that point as quickly as possible. Keep in contact with your mortgage broker and conveyancing solicitor to put the pressure on, ensure your case doesn't fall through, and respond quickly to requests for information.
You can get a lock-out agreement, a contract between the seller and the buyer stating the buyer has the exclusive rights to buy the property within a given period to avoid gazumping.
The housing market is competitive, and you need to find the best deal. If you have found your dream property in a perfect location offered at a good price, but an offer has already been accepted, gazumping may be the only option if you want to buy the house of your choice.
However, Gazumping is not smart; while it may be a little bad, but is not illegal, and it means some buyers may have to do it to get the right property.
What Does SSTC Mean In Property?
What does SSTC mean in property? Having the property under the SSTC label means the seller has agreed to a bid from a buyer, but the property sale has not been completed, as SSTC is not a legal contract.
Well, it is often used by those looking to buy residential properties or other types of real estate assets listed on the brokers' sites, as it ensures that the seller will no more accept bids from other parties, and it also shows that the buyer has proof of funds to pay for the transaction. In addition, it gives the seller and buyer a strong position to further negotiate and determine the terms of the contract.
Sometimes it is said that the estate agents encourage the seller to gazump where the seller accepts an offer from one buyer as they earn a percentage of the sold, so they will pass any offer to the seller that can get them a higher commission. Sometimes, the brokers invest such last-minute prices in pressuring the buyer to avoid being gazumped.