In the dynamic world of property market in the United Kingdom, there are several terms and phrases that both buyers and sellers encounter throughout the process. One of these is ‘Sold Subject to Contract’ (SSTC), which often leaves individuals with various questions and a sense of uncertainty. In this blog, we share insights by experts including top estate agents in Winchester about what SSTC signifies for both buyers and sellers, shedding light on its implications and how it impacts the property transaction process.
Understanding ‘Sold Subject to Contract’
To start, let’s break down what ‘Sold Subject to Contract’ means. When a property listing carries the SSTC status, it signifies that the seller has accepted an offer from a potential buyer, but the transaction has not yet been finalised. In essence, the property is no longer available for further viewings or offers while the details of the sale are being worked out.
Implications for Sellers
For sellers, having their property marked as SSTC is a significant milestone in the sales process. It means that they have successfully attracted a buyer who is willing to proceed with the purchase, pending certain conditions. However, it’s important for sellers to understand that an SSTC status does not guarantee the sale will go through smoothly or at all.
- Security: Sellers gain a degree of security knowing that their property is reserved for the buyer who made the offer. This discourages other potential buyers from making competing offers and helps streamline the sale process.
- Timeframe: The sale of a property marked as SSTC typically takes a few months to complete. During this period, the buyer conducts various checks and surveys, and the legal aspects of the transaction are sorted out.
- Gazumping: While SSTC offers some protection against competing offers, it does not entirely eliminate the possibility of a higher offer from another buyer. Until contracts are exchanged, the sale is not legally binding, and sellers should be cautious of gazumping (a situation where another buyer makes a better offer).
- Property Maintenance: Sellers should maintain their property in the condition agreed upon during negotiations. Failing to do so might give the buyer leverage to renegotiate or, in extreme cases, pull out of the deal.
Implications for Buyers
On the buyer’s side, an SSTC property can be both promising and somewhat nerve-wracking. It means that their offer has been accepted, but the deal is not yet sealed. Here’s what buyers should consider:
- Commitment: As a buyer, an SSTC property signals your commitment to purchasing it. You should be ready to proceed with surveys, inspections, and the legal process promptly.
- Negotiation: While the price and basic terms may be agreed upon, there may still be room for negotiation during the conveyancing process. This could involve issues uncovered during surveys or legal matters that need to be addressed.
- Timing: Be prepared for the fact that an SSTC property transaction can take some time. Delays can happen due to various reasons, including legal issues, chain delays, or unexpected events.
- Financial Preparations: Ensure your finances are in order, as an SSTC property requires financial stability. You’ll need to cover the cost of surveys, searches, legal fees, and the deposit.
The Conveyancing Process
The conveyancing process plays a pivotal role in the SSTC status. Conveyancing refers to the legal transfer of property ownership from the seller to the buyer. During this phase, various checks and searches are conducted to ensure a smooth and legally compliant transaction.
- Property Surveys: Buyers typically arrange for a property survey to assess the condition of the property. Depending on the results, they may negotiate further with the seller or request repairs.
- Searches: Searches are conducted to reveal any issues that might affect the property, such as planning restrictions, environmental concerns, or disputes over boundaries.
- Legal Documentation: The buyer’s solicitor will prepare and review the legal documentation necessary for the sale. This includes the draft contract, title deeds, and other legal paperwork.
- Exchange of Contracts: Once both parties are satisfied with the terms and conditions and all checks are complete, the contracts are exchanged, and the sale becomes legally binding.
What If the Deal Falls Through?
Even though an SSTC property indicates a significant step towards the sale, it’s essential to recognise that deals can sometimes fall through. Some common reasons include:
- Buyer’s Change of Heart: Buyers may decide against the purchase for various personal or financial reasons.
- Survey Issues: A property survey may reveal significant problems that the buyer is unwilling to address or negotiate over.
- Chain Breakdown: If the sale is part of a property chain (where the buyer is also selling a property), complications in another transaction can impact the SSTC property’s sale.
- Gazumping: Despite SSTC status, a higher offer from another buyer could tempt the seller to reconsider.
Sold Subject to Contract’ is a significant milestone that marks the acceptance of an offer. For sellers, it represents a step closer to finalising the sale, but it doesn’t guarantee a smooth process. Buyers, on the other hand, must be prepared to fulfil their commitments and navigate the conveyancing process.
It’s essential for both parties to be aware of the potential challenges that can arise after SSTC status and to have professional guidance throughout the transaction. Whether you’re a buyer or a seller, understanding the implications of SSTC status is crucial to a successful property transaction in the UK.