Sold STC: What does it mean for buyers and sellers?
Sold STC means “Sold Subject To Contract”.
Basically it means an offer has been made on a property which has been agreed by a vendor, but that purchase is not yet legally binding as the filing for the offer has not yet been completed.
If something is sold STC, it means the main points such as price has been made between the two parties but, the sale is still subject to change. Even though it has the word ‘sold’, it doesn’t mean that the sale is already complete since the final contract has not yet been signed and exchanged. All of which signifies the following:
· The sale is not guaranteed that it will go ahead.
· The sale can still fall through for various reasons
· The houses under ‘sold STC’ are technically still on the market.
According to Rightmove, it may still be worth contacting the estate agent to discuss the strength of the accepted offer, particularly as there is no legal obligation on homeowner or homebuyer to complete the sale. On average about 15% of Sold STC properties come back on the market after the sale has failed to proceed.
However- that's not all you need to know - that's just the basics. Let’s dive a little deeper to discover more about why houses sold subject to contract are something you shouldn’t neglect.
What is the difference between Under Offer and STC?
“Under offer” means a final offer has been made by a buyer which is being considered by the seller but yet to confirm whether they will accept it or not.
If the offer is declined, then the house remains on the market until to the next formal offer is made. But when the offer is accepted, the property then becomes “Sold STC“.
What does Sold STC mean for the Buyer?
As a buyer, once an offer has been accepted and the property you are looking to buy is listed as sold STC, it is now time to:
· finalize your mortgage
· instruct your solicitor - to conduct the searches and organize surveys
· make sure that you are certain on everything regarding the property
· negotiate the contracts
· arrange all the details of the sale before signing the contracts
This stage is a chance to make sure that all the necessary information are gathered, including that there are no damages or extra costs that need to be accounted for, for a more considered purchase before the sale becomes legally binding.
Keep in mind that this part of the process is also crucial as once you’ve exchanged contracts, it’ll be too late for you to pull the deal out and you will be legally obliged to buy the property.
What does Sold STC mean for the Seller?
Once an offer is formally accepted, you as the seller can now start the legal processing of the transfer of the ownership by instructing a solicitor.
When your property is sold STC, it will be listed on any property markets as such and won’t technically be classed as an available property. Your property will remain on your agent’s website and property portals - such as Rightmove, Zoopla, etc. – unless requested by the buyer for it to be removed.
There is also nothing to halt other interested parties on enquiring about the status of your property and on putting in an offer. Even though after your property has been listed as sold STC, it is technically still available and your agent is legally obliged to ensure that you are well-informed of any new interest and new offers.
In addition, the conveyancing process can also begin. Both your solicitor and the buyer’s legal representative will work together to complete the transfer of ownership from this point onwards.
Well, it depends. There are many different factors involved in buying a home. So it can be a lengthy process. There is no set time for how long a home to be tagged from ‘sold subject to contract’ to being legally sold.
Usually, the time that it takes to buy a home is six 6 to 12 weeks, but it can take up to 6 months from the point the sale is agreed.
The longest part of the process is usually the conveyancing part of both parties, the seller and the buyer, where the solicitor needs to get in touch with lots of third parties to check there aren't any risks to the property.
Can I make an offer on a house that is Sold STC?
Yes. You can still make enquiries about a property and even make an offer on a house that is Sold Subject to Contract.
There’s still nothing in place legally that hinders further offers being made. If you put in an offer higher than what the seller has already accepted, and the seller accepts, which is known as ‘gazumping’. Apparently, gazumping isn’t illegal but it is a practice which strongly advise against as it is extremely unfair and, arguably, immoral.
Estate agents are legally obliged to inform the seller of any offers made. Agents are entitled to keep the interested parties on file so they can be contacted should the current buyer decide to pull out.
Can sold STC fall through?
There are researches shown that nearly a third of property purchases fall through when the property is Sold STC. Many sales don’t make it to contract exchange even after the seller has accepted an offer, for a number of reasons such as:
· The seller deciding not to sell and take the property off the market.
· The buyer pulling out when their own sale fell through.
· The buyer found a different property to purchase.
· The buyer was gazumped.
· The lender may decide they're not willing to lend the funds.
· The property survey may highlight some issues, prompting you to withdraw your offer – or the lender to withdraw their mortgage offer.
· The local searches may reveal something that makes you decide to pull out.
It’s only when the contracts have been exchanged that everyone can truly breathe a sigh of relief.