If you’re moving or thinking about moving, you’ll probably come across the term SSTC. But what does it actually mean for buyers and sellers?
Sold Subject to Contract (SSTC) is a status that a property can obtain once a seller has accepted an offer from a potential buyer.
Essentially, it indicates that the property is off the market, at least temporarily, as both parties look to complete the sale.
However, it is important to note that Sold Subject to Contract doesn’t signify a completed transaction. Instead, it’s a transitional phase in the home-buying process.
Understanding what STCC signifies is crucial for both buyers and sellers, as it plays a pivotal role in the transaction process.
Here, Lang Town & Country covers what Sold Subject to Contract means for buyers and sellers and its implications for all parties involved.
What are the implications of STCC for sellers?
As a seller, STCC status is a promising sign that your property is one step closer to changing ownership. Here we look at some key Sold Subject to Contract implications for sellers.
1. No new offers or viewings
Once a property is SSTC, it is typically taken off the market. This means that any new offers and viewings are unlikely to be considered, as the seller has already accepted an offer and is in the process of finalising the sale. However, if an offer is made on the property the estate agents are bound by law to put the offer forward.
SSTC provides a degree of stability for sellers. It means that they have a committed buyer in place, reducing the uncertainty associated with potential offers falling through or fluctuating market conditions.
3. Legal obligations
Sellers are legally obligated to continue with the sale once they have accepted an offer, Subject to Contract. However, this is not a legally binding contract, and either party can still withdraw from the deal if certain conditions are not met during the subsequent stages of the process.
4. The property is “off the market”
While the property is off the market, in most cases it is not uncommon for sellers to consider back-up offers, especially if they have concerns about the buyer’s ability to complete the transaction.
What are the implications of STCC for buyers?
As a buyer, understanding what STCC means is equally important. Here’s what you need to know about ‘Sold Subject to Contract’.
1. There’s no guarantee
An SSTC property is not guaranteed to become yours. Until contracts are exchanged, there’s still a chance the deal could fall through for various reasons, such as issues discovered during surveys, financing problems, or disagreements over contract terms.
2. Time sensitivity
As a buyer, you may feel a sense of urgency when you encounter an SSTC property you’re interested in. While you can still make an offer, it’s crucial to act quickly, as the seller is more likely to proceed with the existing offer rather than entertain new ones.
In some cases, if the sale falls through for any reason, the property may return to the market. This presents an opportunity for buyers to negotiate a better deal, as the seller might be more motivated to sell after a failed transaction.
4. Be thorough
During the SSTC period, buyers should conduct thorough due diligence, including property inspections and surveys, to identify any potential issues that could affect their decision to proceed with the purchase.
What is involved in the SSTC process?
The process leading to ‘Sold Subject to Contract’ (SSTC) status involves several crucial steps:
1. Offer Acceptance
The seller accepts an offer from a buyer, usually in writing. This offer outlines the proposed purchase price and any specific conditions or contingencies.
2. Instructing Solicitors
Both parties instruct solicitors or conveyancers to handle the legal aspects of the transaction. This includes drawing up contracts and conducting searches and inquiries.
3. Property Surveys
The buyer typically arranges for surveys or inspections to assess the condition of the property. If issues are discovered, negotiations may occur regarding repairs or price adjustments.
4. Exchanging contracts
Once all parties are satisfied with the terms, the contracts are exchanged. This is a legally binding step, and both parties are committed to completing the transaction.
Finally, the sale is completed on the agreed-upon date, and ownership of the property is transferred to the buyer. Funds are exchanged, and the keys are handed over.
What are the common reasons for a property sale falling through?
While an SSTC property indicates progress, it is essential to be aware of the common reasons a sale may fall through.
- Survey issues: Problems uncovered during property surveys, such as structural defects or extensive repairs needed, can lead to renegotiations or even a deal collapse.
- Financing problems: Buyers may struggle to secure the necessary financing, leading to a failed transaction.
- Gazumping: In competitive markets, another buyer might make a higher offer, leading the seller to reconsider their acceptance of the original offer.
- Chain breaks: If the buyer or seller is part of a property chain (where they need to buy or sell another property before completing the transaction), issues within the chain can disrupt the sale.
- Change of heart: Either party might have a change of heart or personal circumstances that lead to a withdrawal from the deal.
If you have any questions or would like to know more about the implications of STCC (Sold Subject to Contract), please get in touch using the contact details below.
I’m thinking about moving. What’s the next step?
If you’re thinking about moving, your first step should be to get your current property valued.
Please do contact us using the details below and we’ll be more than happy to offer advice and a free valuation of your home.
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