You see your dream house on rightmove or with a sign outside in the front garden, then your heart sinks. Where the ‘For Sale’ part of the sign was has now been replaced with Sold STC. What does this mean? Is it gone forever?
SSTC Meaning Explained….
Let’s start with the good news.
Sold STC means:
- A sale price has been agreed between the seller and a purchaser
- Absolutey nothing has been signed, so technically the property is not sold at all.
- The key part of Sold STC is the STC which stands for ‘Subject To Contract’.
How The Property Market Works In England And Wales
Here is the sale of property process in England and Wales:
- A house owner decides to put their property up for sale
- They ask and estate agent to marketing their property to find a buyer
- The estate agent lists the property on their own website and the online property portals such as Rightmove
- People see the property and ask to view it (potential purchases).#
- One of the viewers likes what they see enough to make an offer to buy the property, often for less than the seller is asking for it. For example, if the house is for sale for £345,000, the potential purchase might offer £325,000 as a starting offer.
- The seller often rejects the first offer, and might counter offer £337,500.
- The purchaser might reject this but then offer £335,000, which the seller accepts.
THIS IS NOW THE SOLD STC PART. An offer has been made by the purchaser which has been accepted by the seller. The property is sold but subject to a contract being signed.
In real terms it is not sold at all, as until those contracts are signed AND EXCHANGED, no sale has taken place at all.
Let’s continue with our property sale process:
- The purchaser asks a conveyancing solicitor to start the process of buying the house at the agreed price.
- The conveyancing solicitor will carry out local authority searches to see if the property is subject to any planning restrictions, to land registry searches to confirm the current seller is indeed the owner or environmental searches to see if the property is on contaminated land or water.
- The purchasers solicitor will liaise with the mortgage company to ensure that the purchaser receives a formal mortgage offer, which will allow them to purchase the property (if a mortgage is required, which in most cases it is).
- A contract is prepared to ‘convey’ the property from the seller to the purchaser, which is where the term ‘conveyancing’ comes from – the process of passing ownership from the seller to the owner of a property.
- Once the contract is agreed, the purchaser’s solicitor and the seller’s solicitor each hold a signed copy of the contract until they are ready to go ahead and EXCHANGE these contracts.
At this point the house is still only Sold STC, it is Sold SUBJECT TO these contracts being exchanged by the purchaser and seller’s solicitors.
Someone else could still at this stage make an offer to the seller, usually at a higher price than the first offer (£335,000 in our example above) and the seller could decide to accept that offer (this is called gazumping – you can read more in our what is gazumping article).
If gazumping took place, the original purchaser could have spent hundreds of pounds but would be entitled to nothing at all, because no contracts had been exchanged.
Let’s continue our conveyancing process:
- When all of the ducks are lined up in a row, with identical contracts completed and signed and held by the purchaser and solicitor’s solicitors, the searches have all come back as expected, the mortgage offer is with the purchaser’s solicitor meaning that the mortgage company will pay the money to the seller’s solicitor on completion, a date is agreed to exchange contracts.
- Exchange of contracts now takes place on the agreed date. This ends the period when the property was Sold STC.
The period when the property was Sold Subject To Contract (Sold STC) is now ended.
It is now Sold and if either the purchaser or seller tried to pull out of the sale now, there would be serious financial penalties to be paid, because the contract compels them to complete the sale on a set date.
What happens next:
- The purchaser’s solicitor liaises with the mortgage company to ensure the money is in their bank account on the date of completion, and collects any difference between the mortgage amount and purchase price of the property from the purchasers.
- The seller arranges for their property to be emptied, and the purchaser’s arrange to move their own possessions into the property on completion date.
- The day arrives, and both parties wait to hear when the purchaser’s conveyancing solicitor has sent over the money, meaning COMPLETION has taken place.
- The seller’s conveyancing solicitor tells the Estate Agent that the sale has completed and that they can release the keys to the property to the purchaser.
- The purchaser’s conveyancing solicitor now tells the purchasers they can move into their new home and how to when and where they can collect the keys from the Estate Agent.
If you are looking at a property that is Sold STC, we hope that you now know what that means and what your options are.
Why You Should Speak With A Specialist Solicitor Now
If you intend to buy a house now or in the near future, it is a really good idea to speak with a conveyancing solicitor as soon as possible in the process.
They can advise you on what Sold STC means, but also on what to look out for in the specific location where you are looking to buy, because they will have good local knowledge of the area from the many conveyances of property that they have already carried out.