A property’s status will be regularly updated when it’s listed on the market.
It’s common to see a house listed as ‘sold subject to contract’. But you’re not alone if you don’t know what this means.
Keep reading this blog to find out.
What does sold subject to contract mean?
When a house is sold subject to contract, the seller has accepted an offer.
The owner has thus moved into the conveyancing process. Surveys and searches are being completed by solicitors.
This status means that the seller expects to complete a sale with their existing buyer. But it isn’t legally binding yet.
If problems reveal themselves before the exchange of contracts, the deal can fall apart.
Buyer’s vs. seller’s interests
It’s often advantageous for a buyer to have the house listed as sold subject to contract. It can put off other people from making an offer.
Meanwhile, it’s rarely in the seller’s best interest. After all, it removes visibility and enquiries from other potential buyers for a significant period.
What happens after a property is SSTC?
Once a house is sold subject to contract, the conveyancing work begins to finish the sale.
All the relevant information is collected and defined.
The contracts are written up and can be exchanged between the buyer and seller. Once this is complete, the sale is legally binding.
Reasons to list house as sold subject to contract
A house may be listed as sold subject to contract for several reasons. You can see the most common explanations below.
Reassure the buyer
Buyers are often nervous about the competition.
They may be fearful that they’ll get gazumped at the last minute. Listing the house as SSTC can demonstrate good faith from the seller.
It’s symbolic but demonstrates their commitment to the current buyer.
Estate agent encourages it
Estate agents may advise you to list your house as SSTC. It’s a great way to promote themselves, as having found a suitable buyer quickly.
It may also be useful if your buyer is based overseas or you’re looking for a ‘cooling-off’ period during which the transaction slows down.
To turn away any other offers
Sometimes, a homeowner will feel inundated with offers. It can be overwhelming and distracting.
To put this to an end, listing the house as SSTC can discourage more people from applying. It’s a fortunate dilemma to have!
Can a sold subject to contract deal fall apart?
Yes, an SSTC deal can fall through.
This can put the seller back to square one. That’s why some buyers will still view and offer on an SSTC house.
(You can see potential reasons for this in the section below.)
Buyers and sellers can both help to prevent the sale from falling through. You should be open about your situation, whether or not you’re in a chain or a cash buyer.
The seller should be upfront about any flaws in the property. This ensures the buyer has all the information before they make their offer.
Another way to avoid a sale falling through is to ensure it is completed quickly.
Both parties can help speed things along by choosing the right solicitors to do the conveyancing work efficiently and proactively producing paperwork.
Reasons a SSTC deal may fall apart
An SSTC transaction can fall apart for several different reasons. Each sale has unique circumstances.
Someone else makes a higher offer
This is commonly known as ‘gazumping’. It’s when a new buyer appears at the last minute and hijacks the deal with a higher offer.
Some people think this is immoral, while others say it’s fair.
A problem is revealed with the property
Homeowners aren’t always completely honest about issues with their property.
A buyer will sometimes discover a major problem at the last minute. It’s then up to them whether to proceed, reduce their offer, or walk away.
The latter two options can both cause the sale to collapse.
The buyer struggles with funding
A contract can’t be signed until the buyer gets a written mortgage agreement from a lender.
However, the sale can be jeopardised if the bank or building society drags its heels over this.
Likewise, if the buyer is made redundant at the last minute, everything can change instantly.
A break elsewhere in the property chain
An SSTC transaction falling apart isn’t always the fault of the people involved.
If there’s a problem elsewhere in the chain, it can force one of the parties to halt, even if they don’t want to.
This can mean the deal doesn’t go ahead.
Can I view an SSTC house?
Yes, if the seller agrees.
Some homeowners will ask their estate agent to refuse all house viewings while their property is SSTC.
But others will encourage more viewings to take place. Speak to the estate agent and check the status.
Can I offer on an SSTC house?
Yes, you can make an offer on an SSTC house.
This is often known as ‘gazumping’ if you make a better offer than the current buyer. Of course, knowing whether your price is better or not can be tricky.
There’s nothing wrong with contacting the estate agent to learn more about properties that are sold STC and register interest.
There’s always a chance that someone might pull out of a sale.
How long for a sale to complete once a house is SSTC?
The average time is 12 weeks.
This is affected by how quickly the estate agents and solicitors work, how long the searches take, and how long it takes for a mortgage to be completed.
The length of the property chain will also impact the timeframe.
If there’s no chain, the process could be as quick as six to eight weeks.
The buyer and seller can help keep the process moving by being proactive and organising the relevant paperwork as soon as possible.
This will include details of both parties’ solicitors, proof of identity, and the buyer’s proof of funds.
