There are times when buying a property can be complicated, for example, the terms Sold Subject to Contract also known as STC or SSTC are often visible on “For  Sale” boards and website property listings.

What Does Sold Subject to Contract (SSTC) Mean?

Sold Subject to Contract (SSTC) is a common term used in the UK property market to describe a specific stage in the process of selling a property. When a property is listed as SSTC, it signifies that the seller has accepted an offer from a buyer, but the transaction has not yet been finalized.

SSTC is a critical phase in the property transaction process that reflects a serious but not yet legally binding commitment from both parties. Understanding the nuances of SSTC helps buyers and sellers navigate this stage more effectively, ensuring they are prepared for the subsequent steps towards a successful property sale or purchase. If you need further assistance or have specific questions about your property transaction, feel free to reach out to us at RCCIL. We are here to provide expert guidance and support throughout the process.

What Does SSTC Mean If You Are A Seller?

  1. Sign of Progress:
    • SSTC, which stands for “Sold Subject to Contract,” indicates that you have accepted an offer on your property. This is a significant milestone in the selling process as it shows that there is serious interest in your property.
  2. Still Open for Backup Offers:
    • Although an offer has been accepted, the sale is not yet legally binding. This means that, until contracts are exchanged, you are still allowed to accept other offers. However, it’s crucial to communicate transparently with all parties involved.
  3. Legal and Financial Preparations:
    • Once your property is SSTC, you will need to work closely with your solicitor to handle the necessary legal paperwork. This includes responding to inquiries from the buyer’s solicitor and ensuring all documents are in order for the exchange of contracts.
  4. Property Status:
    • While your property is SSTC, it is often still listed as available, but with the SSTC label, indicating that an offer has been made but the deal has not yet been finalized.

Two home owners with a Sold subject to contract sign

What Does Sold Subject To Contract Mean If You Are A Buyer?

  1. Understanding the Status:
    • When a property is marked as SSTC, it means that the seller has accepted an offer from another buyer, but the sale is not yet legally binding. This stage involves the preparation of contracts and other legal checks.
  2. Opportunities Still Available:
    • If you are interested in a property marked as SSTC, it is worth expressing your interest to the estate agent. In some cases, if the current offer falls through, you may have the opportunity to make your offer.
  3. Due Diligence:
    • If your offer has been accepted and the property is SSTC for you, it’s essential to proceed with due diligence. This includes conducting property surveys, finalizing your mortgage arrangements, and working with your solicitor to handle all legal aspects of the purchase.
  4. Possible Risks:
    • Understand that until contracts are exchanged, either party can withdraw from the transaction without any penalties. This stage can involve some level of uncertainty, so it’s crucial to maintain good communication with your solicitor and the seller. We have a useful buy-to-let guide that may be of use to anyone considering this type of property investment.

Can a Property Sold Subject to Contract (SSTC) Fall Through?

Yes, a property that is Sold Subject to Contract (SSTC) can still fall through. Here’s a detailed explanation of why and how this can happen, along with potential reasons and implications for both buyers and sellers.

Why Can SSTC Transactions Fall Through?

Non-Binding Agreement – The term SSTC indicates that an offer has been accepted, but the sale is not yet legally binding. Until the contracts are exchanged, either party can withdraw from the transaction without legal repercussions.

Due Diligence and Legal Checks -During the SSTC stage, buyers typically conduct property surveys and finalize their mortgage arrangements, and their solicitors carry out various legal checks. Issues that arise during these processes can lead to the sale falling through.

Common Reasons for SSTC Transactions Falling Through:

  1. Survey Issues:
    • Property surveys might reveal structural problems, dampness, or other issues that could affect the property’s value or the buyer’s willingness to proceed.
  2. Mortgage Problems:
    • Buyers might encounter difficulties in securing a mortgage, either due to changes in their financial situation or the property not meeting the lender’s criteria.
  3. Gazumping:
    • The seller might receive a higher offer from another buyer and decide to accept it, leaving the original buyer out of the transaction.
  4. Legal or Title Issues:
    • The buyer’s solicitor might uncover legal issues with the property, such as disputes over boundaries, unclear title, or restrictive covenants, which could deter the buyer.
  5. Chain Breakdowns:
    • Property transactions often involve chains of buyers and sellers. If another transaction in the chain falls through, it can impact the SSTC sale.
  6. Buyer or Seller Withdrawal:
    • Either party might change their mind for personal reasons, such as a change in circumstances or finding another property.

Implications for Buyers

Due Diligence – Buyers should conduct thorough surveys and legal checks to ensure they are fully aware of the property’s condition and any potential issues.

Financing – Ensure that mortgage arrangements are in place and maintain open communication with the lender to avoid last-minute financing issues.

Risk Management -Be aware of the risk of gazumping and consider whether to invest in insurance against it, known as “gazumping insurance.”

Implications for Sellers

Transparency – Provide accurate information about the property to avoid issues during surveys and legal checks.

Open Communication – Maintain clear communication with the buyer and their solicitor to address any issues promptly.

Consider Backup Offers – Be open to considering backup offers to have alternatives if the initial transaction falls through.

While SSTC is an important step towards completing a property transaction, it is not a guarantee that the sale will be finalized. Both buyers and sellers need to be prepared for potential issues that could arise and work proactively to address them. For any further assistance or detailed guidance on navigating the SSTC process, feel free to reach out to us at RCCIL. We are here to provide expert support and ensure a smooth UK property investment transaction.

For both sellers and buyers, SSTC is an important phase in the property transaction process. It signifies a serious commitment but also highlights the importance of continuing with due diligence and preparation to ensure a smooth transition to the next stages of the sale or purchase. Learn more on the official OneTheMarket website.

If you have any further questions or need assistance with a property transaction, feel free to reach out to us at RCCIL. We’re here to help you navigate the complexities of the property market with ease and confidence.

Why not read the latest Martin Lewis guide on how to invest a £100K