Buying a House > Sold STC

If you’re in the market for a new house, you’re probably knee-deep in estate-agent jargon already. So, you’ve found what looks like your dream home but you’re told it’s “Sold STC”. But what do these terms mean?

What does “Sold STC” mean?

Sold STC means sold subject to contract. But to understand what this really means, it’s helpful to start with another term you’ll like come across: Under Offer.

If a property is Under Offer, this means that a buyer likes a property enough to place an offer on it – but the home owner has yet to decide if they’re going to accept it or not. If the offer is subsequently accepted, the property is now ‘Sold Subject to Contract’ (Sold STC). All that is required now is for the buyer and seller to exchange signed contracts.

Other buyers can make enquiries about a property at both the Under Offer and Sold STC stages – as the sale is not yet legally binding.

If you’re looking at new-build properties, you may come across the term “reserved property”. This is when a homebuyer has paid a reservation fee to acquire a new-build. The homebuyer generally has 28 days to exchange contracts from reservation date (depending on the developer). If contracts remain incomplete, the property becomes available again. Reserved properties are generally withdrawn from sale and are often not subject to any price increases.

Can a “Sold STC” Property Come Back onto the Market?

As we’ve said, a sale is not legally binding until contracts are exchanged. So the sale of a property sold subject to contract can still fall through – meaning the property comes back onto the market. It’s said that on average about 15% of “Sold STC” properties come back onto the market for this reasons. So why might a sale fall through?

If you’ve never bought a home, it’s easy to imagine you just put in your offer, get it accepted and hey presto you’re moving in. But between getting your offer accepted and getting the keys, you have several hurdles to get over: property surveys, conveyancing and – for most buyers at least – the mortgage.

  1. You can only find out so much about a property from the estate agent and your own general research. Property surveys give buyers more information about the property they’re buying, assessing things like subsidence or damp.
  2. The conveyancing process takes care of the legal aspects of exchanging property. A key part of this are conveyancing searches – which assess various external factors (like ancient liabilities, flood risk and environment factors) that might affect the value or livability of the property.
  3. Buyers should go into their property search with an idea of the kind of mortgage they good secure and manage. But there’s no guarantee that an application will be accepted – particularly issues in the property surveys and conveyancing searches will be every bit as off-putting to lenders as to buyers.

There are plenty of reasons why a sale might fall through. So, if a house is Sold STC, don’t despair, you’re still in with a shout. But bear in mind that, once you get to the Sold STC stage yourself, your purchase could fall through for the exact same reasons. Moving house is a win-some, lose-some game.

Remember as well that nothing prevents you putting in a higher offer on a property sold subject to contract. Estate Agents are legally obliged to pass on any offer they receive*, no matter what they may think of it themselves. And the sellers aren’t legally committed – even if they’ve accepted an offer – until the contracts are exchanged. They may be tempted to drop their existing buyers if they think there’s a better deal on the table.

This process of unseating prospective buyers is called gazumping. And while it’s often seen as bad form, especially by gazumpees, it is a perfectly legitimate process and – for better or for worse – and ingrained part of the UK property market. Whether you’re planning some gazumping – or want to make sure you’re not gazumped yourself – our brief guide to gazumping will tell you all you need to know.

*unless the Estate Agent has a signed letter from the homeowner stating that they will not consider offers below a set figure

One Last Acronym: Sold STCM

Buying and selling property is replete with acronyms as it is. If you’re buying in Scotland, here’s one more you may encounter: Sold STCM, sold subject to conclusion of missives.

Property law is slightly different in Scotland than in the rest of the UK. In Scotland, an offer on a property is legally binding as soon as it’s accepted – there is no Sold STC stage. This limits the scope for properties to come back onto the market, as well as the opportunities for gazumping. However, there’s still paperwork that needs doing in order to complete a sale – and occasionally these “missives” (the name for the paperwork in Scotland) fall through, hence the term Sold Subject to Conclusion of Missives (Sold STCM).

So there we have it – a few items of terminology for your memory bank. You’re unlikely to need terms like Under Offer, Sold STC, Reserved and Sold STCM in order to navigate day-to-day conversations. But, if you want to put yourself in the best possible place during your house hunt, it definitely pays to get your head around them.

 


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