Buying and selling your home comes with plenty of legal terms you might not be familiar with. This post covers one of the most common terms you’re likely to come across during the conveyancing process: SSTC, or sold subject to contract. What does it mean for buyers and sellers? Can you make an offer if you’ve fallen in love with a property that’s SSTC? This article covers these FAQs and more, so you can make your move with confidence.
What does SSTC mean?
You may see a property listed as SSTC or Sold STC online or on the estate agent’s board outside the home. This stands for “sold subject to contract.” It’s a term used when a buyer has made an offer on a property and the offer has been accepted by the seller, but contracts have not yet been exchanged.
Is SSTC legally binding?
In England and Wales, a sale isn’t legally binding until the point of exchange. So, a property that is only sold subject to contract is not legally binding, and the sale may not reach completion.
However, sold subject to contract doesn’t mean that nothing is moving behind the scenes. Many steps in the conveyancing process, such as instructing conveyancers and carrying out surveys, happen before exchange while the property is SSTC. So, it’s likely that the buyer has invested time and money into the purchase even shortly after their offer is accepted.
What happens when a property is SSTC?
When a house is SSTC, the buyer and seller have reached an agreement on the property’s price and the conditions of the sale. However, as it is not yet finalised, neither party is legally obliged to go through with the sale. So, there is still a chance it will fall through until the point of exchange, which can take several weeks.
Once SSTC, the estate agent should take the property off the market to avoid further offers being made to the seller. However, if more offers are made, the estate agent has a legal obligation to present them to the seller unless they instruct them otherwise. The seller may choose to accept one of the new offers, leading to the original buyer missing out on the sale. This is known as gazumping.
On the other hand, buyers can also withdraw from the sale while the property is SSTC. They may also be able to renegotiate the sale price if there are issues with the property. For example, if a survey uncovers issues with the property that could be expensive to fix, such as extensive damp or a new roof.
Can I make an offer on a house that’s SSTC?
Yes, it is completely legal to make an offer on a property that’s SSTC in England and Wales. However, it’s not always viewed as the most ethical thing to do as the buyer loses the property and any money invested in the process. So, some sellers may not consider further offers for this reason.
Estate agents have an obligation to inform sellers about any offers on their property, even once it’s SSTC. So, you can make an offer, and the seller may accept it if it’s higher than the existing offer, or you are in a position to move more quickly than their original buyer. This is gazumping – when another buyer’s offer is accepted after the initial buyer’s.
You can also register your interest in an SSTC property with the estate agent, so if the sale falls through, they know you would potentially be keen to make an offer.
Can I view a house that’s SSTC?
It’s not common for viewings to happen for a property that’s sold subject to contract. However, in theory, as long as the seller is happy to accept further viewings, you can still legally view a property that’s SSTC.
However, there are risks to the seller – for example, if their original buyer finds out what’s happening and decides to withdraw their offer – so this is not always likely to be an option. You should contact the estate agent the property is listed with to ask about the possibility of viewing it.
How can buyers avoid gazumping?
Being gazumped (the seller accepts an offer from a different buyer after they’ve accepted yours) can be frustrating and time-consuming, not to mention expensive! Once a property becomes SSTC, buyers are advised to instruct their conveyancer, who will start carrying out the legal work, and you’re unlikely to get a refund on these fees if you lose the property due to being gazumped.
While there is nothing you can do to 100% prevent gazumping, it is rare, so try not to worry. There are some measures you can take to help prevent it, such as:
- Asking the estate agent to take the property off property websites as soon as possible, so other potential buyers are less likely to see it.
- If you’re buying with a mortgage, ensure you have a mortgage in principle before making an offer, to help things move quickly.
- Make sure you have your conveyancer lined up and ready to start acting for you as soon as your offer is accepted. This will also help prevent many of the delays that could make an alternative offer look more attractive to the seller.
Is SSTC the same thing as under offer?
In most cases, SSTC and under offer mean the same thing – a buyer has made an offer for a property and the seller has accepted it. However, in some cases, the term “under offer” may mean that an offer has been made but the seller is considering whether to accept it or not. In both cases, it’s not yet a legally binding sale. Contact the estate agent the property is listed with if you need clarification on the property’s status.
What does SSTC mean for buyers?
If you’re buying a property, SSTC means that your offer has been accepted by the seller. This is a significant milestone in your home buying journey.
As soon as your offer has been accepted, you should instruct your conveyancer. They take care of all of the legal processes. The sooner they get started, the more likely it is that your transaction will go ahead smoothly and quickly.
You should ask the estate agent to take the property off the market as soon as possible, or at least mark it as SSTC. This will reduce the chance of being gazumped by another buyer’s offer.
You may also want to instruct a surveyor to do a survey of the property. This can help uncover any issues you may not have noticed at first, before the sale becomes legally binding. You may be able to renegotiate the price if the survey reveals anything concerning that could be costly to fix.
What does SSTC mean for sellers?
Once your property is SSTC, it means that you have accepted an offer made by a buyer. It should be marked as SSTC online, or removed from sites completely if the buyer has asked and you agree. If you have a ‘For Sale’ sign outside the property, this will probably be replaced by a ‘Sold’ or ‘Sold STC’ sign.
You should instruct your conveyancer if you haven’t already, so they can get started with the legal process. They will have some documents and forms for you to fill out that aim to give the buyer more information about the property.
Your conveyancer will also help draft the contract between you and the buyer. The draft contract typically sets out matters like the time for completion and what fixtures and fittings are included in the sale. The contract, and therefore the sale, does not become legally binding until exchange takes place between the conveyancers, using your previously signed contract.
Can the seller or buyer change their mind once the property is SSTC?
Yes, once the property is SSTC the sale isn’t yet legally binding. So, either the buyer or the seller can change their mind for any reason and withdraw from the sale. This can be frustrating for both parties, but the chances of it happening can be reduced by addressing potential issues early on:
- For buyers, ensure you have a mortgage in principle in place before making an offer, and instruct your conveyancer early to get things moving as soon as possible Choose a conveyancer with a good reputation for smooth communication.
- For sellers, consider offers from chain-free buyers, to keep the chain length to a minimum. Also consider fixing any major issues with the property before you sell, so these don’t come up in the buyer’s survey.
- Both parties should set realistic expectations for timescales and prioritise clear communication to hopefully resolve any issues as quickly as possible.
Once you have exchanged contracts, the sale does become legally binding, and there are typically financial and legal consequences to either party withdrawing.
How long from SSTC to completion?
The time the transaction takes from the property being SSTC to completion (when ownership is transferred to the buyer) can vary significantly between transactions. It can take anywhere from a few weeks to six months or more, depending on factors like how complex the transaction is, mortgage arrangements, whether the property is freehold or leasehold, if surveys are undertaken and what they uncover, and the level of communication from both sides. An idea of an average time for a straightforward transaction is 8-12 weeks.
At Setfords, our conveyancers will work with you to minimise delays as much as possible, helping you to get from SSTC to completion as swiftly as possible.
Do SSTC properties always sell?
No, while SSTC means that an offer has been made on a property, it doesn’t always mean that the sale will go through with the same buyer. Something could happen to make the sale fall through, such as either the seller or buyer withdrawing due to gazumping, issues uncovered in the survey, mortgage issues, timings, and more.
So, if you have seen a property you like that’s SSTC, it may come back on the market. Register your interest with the estate agent so they’re aware in case it does come up for sale again.
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