Looking into buying or selling your home? There’s a lot of terminology and jargon in the property industry and one you may have seen regularly is STC or SSTC, there both the same, but what exactly do they mean? In this article we’ll go through what it means for both buyers and sellers, the benefits, issues and more.
What does STC or SSTC mean?
STC or SSTC stands for (Sold) Subject to Contract is the stage that a property goes into when there has been an agreement between the seller and the buyer on the price after going through the bidding stage. At this point in the sale, nothing is legally binding and the property is still technically considered available.
The term is used when an offer has been accepted but contracts have not been exchanged.
What’s the difference between under offer and sold subject to contract?
Under Offer is the stage before it potentially goes to SSTC. This is the point in which an offer has been made on the property but there’s been no agreement as to whether it’s been accepted. It’s essentially a marketing ploy to show that there is interest in the property and try and speed up other potential buyers to get involved.
The property that’s under offer will remain on the market, but once it has been accepted it will change to SSTC (Sold Subject To Contract).
What does it mean for the seller?
As a seller of a property you will move to a SSTC status when you accept a bid from a potential buyer. After your estate agent has checked the buyer’s details & proof of funds, your house will likely be moved to SSTC on major property portals.
This will be the point that you choose and instruct a solicitor and start the whole legal process of transferring the ownership of the property.
What does it mean for a buyer?
For a buyer, once you have made an offer and it’s been accepted you will want to push the estate agent to move it to SSTC. When a property is marked as sold subject to contract, on most property portals like Rightmove for instance, it will be harder to find as if you where doing a search for a property you would need to check a box to make them appear which most users don’t.
If less people see the property then you have less chance of getting gazumped, we’ll touch on it in more detail later but it essentially means someone else offering higher than you, as it’s not contractually agreed the seller could accept the other offer. This might also be at the point you’ve already paid and instructed solicitors.
Is there benefits to the STC stage?
Yes, there’s benefits to both parties, and it exists for that reason. The stage exists for a few reasons, but the main one is for both parties to decide whether the sale is right for them before it becomes legally binding. That doesn’t sound like a great thing if you’re committed to buying it, however it prevents issues further down the property sale line.
It also gives some time for negotiation if there are issues picked up in the survey or concerns, and it allows time to get to the point that both parties are satisfied with the transaction. Once contracts are exchanged you will typically find the rate of people pulling out of the sale is extremely low as you can lose your deposit and the wrong party could even take legal action to redeem losses.
Is there a chance it won’t sell?
Yes. If a property is SSTC as we’ve mentioned before this is usually the time that you get a survey which will bring up any issues with the house. Often this will mean negotiating and can mean if no agreement is made can mean that the buyer or seller pulls out of the transaction, which is frustrating, but probably the best action for both parties.
Sold subject to contract is not legally binding, and it’s just essentially a way of saying there has been an agreement between both parties on the price, but this is subject to a variety of different conditions.
Can another buyer still make an offer if a property is SSTC?
Unfortunately, being sold subject to contract doesn’t protect you from having another buyer swoop in and offer higher than you have. There’s a term for when this happens and it’s called gazumping, or being gazumped.
The estate agent of the seller is always acting on the seller’s behalf, so a prospective buyer could see a house labelled as SSTC and put a call into the estate agent to find out what the offer is and how far along the process is. If they can offer more & speed through the process than it’s pretty unlikely the seller wouldn’t accept the extra money.
This is the reason that ensuring the estate agent takes the property off the market once you’ve agreed a price is essential, it reduces the chances of something like this happening massively. If you get gazumped as a buyer, you may lose some of the money you’ve put into the process such as getting searches done or a survey.
Gazumping and how to avoid it happening
We’ve explained what gazumping is and how you can get gazumped, so how do you stop it happening? There isn’t a huge amount you can do if a potential buyer is really set on the property and has deep pockets, but there are a few things you can do in order to minimise the risk:
- Make sure the sellers agent removes the property off the market straight away, check all major property portals such as Rightmove, Zoopla and On The Market.
- If you find out that someone is gazumping you, be open to listen and see if you can match or at least be close to their offer. They’ll want to stick with you if you are a significant way through the process.
- Make the process as quick as possible. Appoint fast solicitors and keep on at them to try and speed through the process, the quicker the process is the less chance you have of getting gazumped.