What does Sold STC mean?
The phrase ‘Sold STC’ or ‘SSTC’, which some people call it, means ‘Sold Subject to Contract’. This term is used by estate agents when an offer has been accepted on a property and a price has been agreed between the buyer and seller. In other words this means that the actual contract has not been agreed or signed and no money has been transferred. To simplify this further, the agreement between the seller and buyer is not legally binding…yet. This is the case over the majority of the UK, although in Scotland things are a lot different to this, as a contract becomes legally binding as soon as an offer is agreed.
If you have been looking for a home and you come across ‘Sold STC’ you may well be disappointed and think this property has gone to another eager buyer. All is not completely lost though, on average 15% of properties are relisted after they were Sold STC, meaning they fell through and the property is back on the market.
What does Sold STC mean for a Buyer?
Once the property is SSTC (Sold Subject to Contract) all the necessary work begins to actually transfer the ownership of the property into the hands of the buyer. This involves solicitors and can be a lengthy process. At this stage the buyer will typically have to arrange a mortgage, conduct searches on the property, authorise a survey, negotiate contracts and finalise all the details of the sale before it’s legally theirs.
What does Sold STC mean for a Seller?
For the seller it’s a similar story. They have agreed with the buyer and accepted their offer to purchase the property. The seller will also instruct their own solicitor and will begin the process of transferring ownership, answering the buyer’s queries along the way.
What does Sold STC mean for other potential buyers?
As the sale is not yet legally binding any interested buyer can propose an offer on the property and the estate agent is legally required to past this offer on to the vendor to make them aware an offer has been made. Other buyers can also ask to view the property although this decision is up to the Seller.
This sounds very unfair for the buyer?
It is unfair, and is considered very unethical and is generally frowned upon due to the buyers being in the process of purchasing the house and may have spent quite a sum of money on surveys etc. as well as the time and effort they have spent leading up to the purchase.
Can anything be done to stop this happening?
For buyers there are a few ways to reduce the risk of this happening. A lot of the time a buyer and seller will agree either in writing or verbally that no viewings will take place once the offer is accepted and that the property will come off the market and cease to be advertised. This will take the property off the radar for other potential buyers.
Failing that you can take out insurance to protect the financial aspects of the deal or you can draw up an exchange of contracts after the initial offer is agreed to financially commit to the sale earlier in the process, however if you do then have to pull out there could be a significant cost to the buyer.
Despite the small risks, the lack of legal commitment at the Sold STC stage does have its benefits for both sides of the deal. It gives the buyer the option to leave the deal with limited losses should problems arise with the property or the deal itself. For example say a structural issue is found by a surveyor, a buyer will have the freedom to withdraw or renegotiate on the original price should they not be able to put this right.
It can also give the seller the option to secure a better offer if approached by another interested party or help the seller look for other buyers should the original buyer start to run into problems. Whilst a property is Sold STC, other potential buyers may register with the agent so that they can be contacted for a viewing should the property go back on the market.
If you’re looking at properties and find your dream home is ‘Sold STC’ why not pick up the phone and speak with the agent. Ask them to hold your details on record and should anything happen with the property to contact you. Even after that, we think it’s key to check in with the agent every once and while so you’re always first in the queue when properties go back on the market.
We hope you enjoyed our article ‘What does Sold STC mean?’. Have you ever been in the situations mentioned above or have any tips for people in these situations? Please leave a comment below.