Sold Subject to Contract – SSTC meaning
When a property is on sale in the United Kingdom, one might notice a few additional words in a much smaller type beneath the sign, terms that may be confusing to the majority of people. A few of them are SSTC, or Sold Subject to Contract, STC, or Subject To Contract, sale agreed, under offer, etc. Understanding these expressions is very important because buying a property is a crucial investment in one’s lifetime.
- So, what does SSTC mean in the property market?
- Difference between Under Offer (UO) and SSTC
- Can I make an offer on a house sold subject to contract?
- Can you still view a house that is sold STC?
- Can a seller put a house back on the market while under contract?
- Can the seller change his mind after accepting the offer?
- Need to sell your old property?
Having some basic notions on the processes of purchasing and buying a home is recommended, in order to avoid unpleasant situations, gazumping for example (when an agreement between the parties has been reached according to the contract and a third party makes a higher offer succeeding in the acquisition of the property).
The concept of Sold Subject to Contract has a different impact whether one is a buyer or a seller: to the former, it means that at this stage the solicitor will gather the necessary information required in order to make a safe purchase. To the seller, SSTC means that the property has definitely been removed from the market.
So, what does SSTC mean in the property market?
SSTC means that the owner of the property has accepted an offer made by the buyer but the agreement is not yet legally binding because part of the paperwork and process to complete the sale is still missing. Though the expression SSTC or Sold STC is a relatively standard phrase used across the industry, some agents prefer to adopt different expressions, such as Sale Agreed. As mentioned above, Sold STC has a different impact on the seller and the buyer.
Once the property is under SSTC, the seller’s listing will not be removed from the agent’s website, its status will be simply updated so that the purchase process can begin. On the other hand, the buyer will have to wait for all the documents to be collected, a vital process that must take place before the sale becomes legally binding.
Difference between Under Offer (UO) and SSTC
There is no difference between Under Offer (UO) and SSTC. Both expressions indicate that the owner of the property has accepted the offer from the buyer but the paperwork still needs to be completed. However, it is not always a matter of change in terminology. Some estate agents use the expression Under Offer to indicate that an offer has been made and still needs to be accepted.
Until the contracts are signed and exchanged, the property is technically still available because a Sold STC and a UO indicate that the sale is not yet complete. At this stage, it is recommended to contact the estate agent to discuss the accepted offer because from a legal perspective, neither the owner nor the buyer is obliged to complete the sale.
In the UK, an average of 15% of Sold Subject to Contract or Under Offer properties are put back on the market because the sale has not been successful.
Can I make an offer on a house sold subject to contract?
It does not matter if the property is already on sold subject to contract because it is still possible to make an offer. Legally, the estate agent is obliged to pass on the offer to the owner and the last decision is obviously left to the seller.
Most of the time, people who put offers on properties that are already sold subject to the contract are quite determined to snatch them from the hands of the original bidder. Chances are that the vendors will accept the newest offer, regardless of their agreement with the first buyer, especially when this offer is higher or it is, for some reason, under threat.
This practice is normally referred to as gazumping and there is nothing that legally prevents it. Though not illegal, gazumping is very unfair and arguably immoral: there is nothing to stop interested parties making contact to get more info about the offer and the stage at which the sale is at. Is there a way to avoid gazumping? From a buyer’s perspective, the best course of action is to ask the seller, through the agent, if they are willing to remove the property from the market altogether, rather than settling for just Sold Subject to Contract.
This is a solution that can be considered only if all the necessary checks and verifications are carried out to guarantee that the buyer is in a suitable position to keep the offer in place. Another solution to gazumping is to be quick with the buying process: the more time one spends with the purchase, the higher the chances for others to place a better offer. What does it take to be fast during the buying procedure? For sure, being on top of things.
For example, getting a mortgage is vital to move quickly, finding a conveyancing solicitor before choosing a property, and having a good surveyor in mind before placing an offer. Other steps that can be followed include exclusivity (the seller can agree to an exclusivity clause as part of the offer so that nobody else can enter negotiations), request to remove the property from the market as part of the offer, get an insurance (the insurance industry offers coverage for any losses one may incur should the property be bought by another party).
Can you still view a house that is sold STC?
A house that is Sold Subject to Contract can still be viewed because, as mentioned earlier, there is no legal action that prevents a potential buyer from doing this as the sale is not considered successful until the signed contracts are exchanged between the parties. Technically, the property is still available, therefore subject to viewings, offers, and any other action that normally takes place during the early stages of the purchase and selling processes.
This mechanism does not apply to the Scottish house buying and selling system because unlike the rest of the kingdom, here once offers are made, they become legally binding when accepted. In fact, the subject to the contract stage does not exist in Scotland.
Can a seller put a house back on the market while under contract?
Generally, when a house is under contract it cannot be put back on the market because the contract is a legally binding agreement. In fact, both parties have contractual obligations which, if breached, can result in a lawsuit. However, there are circumstances that give a seller the right to put a property back on the market while under contract. For example, a buyer might want to add some clauses to the contract like the cancelation of the sale in the event the mortgage financing falls through.
Likewise, sellers also need to have some type of protection. If a buyer fails to deposit an agreed amount of money into escrow by a specified time, then the seller has the right to put the property back on the market. The sale contract can also be void when the buyer’s check bounces.
Can the seller change his mind after accepting the offer?
Once again, the answer to this question changes depending on the viewer. From the home buyer perspective, the offer can be withdrawn at any time until the offer is accepted by the home seller. What follows is a possible commission that the seller owes to the broker and the possibility to sue the buyer for breaching the contract. On the other hand, when the seller changes his mind after accepting the offer, the commission to the broker is still owed.
Of course, this really depends on the wording of the listing agreement, so it might be wise for the seller to indicate that the commission will be paid once the sale of the property is completed. As a matter of fact, the moment the offer is accepted the contract is legally binding and neither of the two parties can change their mind without the consent of the other party. To have a better idea of the seller’s perspective, the moment this one accepts an offer by a buyer, all the terms of the offer are being accepted. This action sets both seller and buyer under contract, a contract subject to any contingencies required by the buyer in order to conclude the transaction successfully.
Having a basic knowledge of the housing market, the meaning of selling and buying properties is certainly beneficial because there are many terms, processes, and circumstances that can be very confusing for beginners. As indicated earlier, unpleasant situations like gazumping can be easy to avoid knowing the type of scenario and what’s behind the whole process.
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