From Listing To Closing: The Role Of ‘Sold STC’ In The UK Property Sale Process

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The process of selling a property in the UK involves several key stages, from initially listing the property on the market through to final completion when the keys are handed over to the new owner. One important milestone along this journey is when a property is marked as ‘sold subject to contract’ or ‘sold STC’. This signifies that an offer has been made and accepted, but there are still further steps to be taken before the sale is finalised.

In this article, we’ll look at the purpose of ‘sold STC’ and why it’s an essential part of the UK property sale process. We’ll run through the typical timeline from listing to completion, explaining when ‘sold STC’ fits in and what it means for both buyers and sellers. We’ll also consider the benefits and drawbacks of this system compared to alternative approaches used in other countries.

Listing the Property

The first step in selling any property is deciding on a listing price and putting it on the market. This usually involves appointing an estate agent to advertise the property. They will conduct viewings, promote it through their website and other marketing channels, and relay offers back to the seller.

It’s important for the vendor to set a realistic asking price from the outset. This should be based on the current market value of comparable properties in the local area. Over-pricing could mean the property sits on the market for a long time without any offers. Under-pricing may generate interest quickly but risks selling below its true value.

When determining the initial asking price, the agent will research sold prices and current asking prices for similar properties nearby. They will also consider the property’s unique features, condition and location. The marketing material should highlight these attributes to attract the right buyers.

Offer and Negotiation Stage

Once the property is publicly listed, the next key phase is managing offers and negotiating a sale price. Interested buyers will view the property and then make an offer via the agent if they wish to pursue it.

Upon receiving an offer, the agent will present this to the seller and advise them on the best approach for responding or negotiating. This may involve going back to the prospective buyer with a counteroffer, asking for the offer to be increased to a more favourable price. There may be some back and forth with multiple rounds of offers and counteroffers as each party tries to get the best deal.

The agent will help move negotiations along, keeping the seller updated on the buyer’s position and encouraging realistic compromises if needed. However, they cannot force either side to change their stance. It is down to the buyer and seller to reach a mutual agreement.

There may be some creative negotiating tactics along the way. For example, the buyer requests the seller contribute towards conveyancing fees or repairs identified in the survey. The seller may counter that they will cover these costs if the buyer increases their offer.

With high-demand properties, buyers may even submit sealed bids above the asking price to try and secure the sale. The agent will guide the seller in selecting the optimal bid.

It’s important that the agent keeps the seller informed throughout this process and negotiates in their best interests. At the same time, they also need to keep the buyer on the side so as not to lose the sale. This requires skilful negotiation and communication by the agent. The goal is to settle on an agreed price when both parties are satisfied.

Reaching ‘Sold STC’ Status

Once the buyer and seller agree on a sale price, the property will normally be marked as ‘sold subject to contract’ or ‘sold STC’. This means an offer has been made and verbally accepted, but the legal formalities are still to follow.

Sold STC is a pivotal milestone in the sale process. It shows the property is no longer available and has a buyer proceeding with the purchase. However, it is not yet legally binding at this stage. This gives both parties some flexibility to pull out of the deal if unexpected issues arise.

In essence, sold STC signifies

The seller cannot accept higher offers or relist the property. It is effectively off the market. The buyer cannot make offers on other comparable properties. Their focus should be progressing with this one purchase.

The agreed price will form the basis of the final contract, barring any major issues.

Both parties have committed in principle to complete the sale, but are not legally tied in until contracts are exchanged.

This sold STC status is very common within the UK system. Some other countries, such as the USA, have different processes where an offer acceptance immediately creates a binding agreement through a financial deposit. The UK approach gives slightly more flexibility during this interim stage.

The Period Between STC and Exchange

Once a property is marked sold STC, there are still several weeks before contracts are legally exchanged. This in-between phase allows the buyer to conduct detailed checks and the legal process to be followed while keeping both parties committed to the sale.

During this time, the buyer will carry out a survey to identify any issues or needed repairs with the property. They will also make arrangements to secure a mortgage if required, providing documents to show proof of deposit and income. Conveyancers on both sides will draw up the draft contracts and prepare for exchange.

Sales can fall through even at the STC stage if problems come to light in the survey, finances, or legal ownership. The buyer may try to renegotiate the price downwards or withdraw completely if major issues arise.

Open communication between both parties during this period is vital. The seller should allow access to the survey and any other inquiries. Promptly providing documents requested by the buyer’s conveyancer also prevents delays.

For the seller, this STC period can be nerve-wracking as uncertainty remains until the contracts are legally binding. Maintaining contact with their agent and conveyancer helps ensure the sale progresses smoothly through these remaining steps.

While not 100% certain, a successfully agreed STC sale with a committed buyer has a strong likelihood of making it through to exchange if all parties engage constructively. This interim stage is crucial for tying up loose ends before the transaction becomes legally binding.

Exchange of Contracts

This is the most significant milestone which legally commits both parties to complete the sale. The buyer and seller both sign the full contract papers, which are then ‘exchanged’, making the agreement legally binding.

The exchange process is normally handled by the two solicitors/conveyancers. They will agree with a date to simultaneously swap the signed contracts. This may be done digitally or by physically meeting to exchange paper documents. The contract is only valid once both signed copies are exchanged.

If either party were to pull out after this point, the other could sue them for breach of contract. There are limited grounds where one party can withdraw, such as if the other side becomes insolvent. But they may still be liable for costs.

The buyer also pays their deposit at the exchange, usually around 10% of the purchase price. This deposit is held by the seller’s solicitor. If the buyer later withdraws, the seller keeps this deposit as compensation. The deposit shows the buyer’s firm commitment to purchase.

With contracts exchanged, both parties must now fulfil all their remaining obligations ready for completion. The seller is legally committed to vacating the property by the agreed completion date. At the same time, the buyer will finalise their mortgage, sign the transfer deed, and ensure the remaining funds are available.

The few weeks between exchange and completion allow all the final preparations to be made. It is still possible for delays to occur if problems crop up. But exchange represents the point of no return where both sides are legally tied into the transaction.

Completion Day

This is the day when the property transaction is concluded and the keys are handed over. The buyer pays the outstanding balance and becomes the new legal owner. Completion often takes place around 1-2 weeks after exchange. But in some cases, longer completion periods may be agreed upon, especially if a property chain is involved.

On completion day, the solicitors will confirm the funds have been transferred. The estate agent will hand the keys over to the buyer. The buyer can then move into their new home, while the seller vacates the property with all their belongings. Ownership has officially changed hands.

After completion day, the solicitors will deal with stamp duty payments and officially register the sale with the Land Registry. But from the buyer and seller’s perspective, their transaction is now finished – the sale has gone through. The seller receives their net proceeds, while the buyer gets the keys to their new property.

Benefits of the ‘Sold STC’ System

The sold STC system offers some benefits within the UK property sales process:

It locks in a buyer but still allows flexibility before the exchange of contracts. This helps sales progress smoothly through the legal work without either party pulling out unnecessarily.

The STC status flags the property as ‘under offer’ so the seller cannot accept other bids. This gives the buyer some security during the legal phase.

It builds commitment from the buyer by removing the property from the market at an early stage. But does not tie them in fully until all checks are made.

Keeps both parties focused on progressing the sale through the interim phase. Avoids time wasting for buyers making too many offers.

Allows a cooling-off period for emotions to drop after verbal agreement. Important for big decisions like property purchases.

Provides a milestone and motivation during a lengthy sales process. Progressing to STC feels like a positive step.

Potential Drawbacks

Despite its benefits, the STC system also has some limitations and downsides:

It can lengthen the sales process by having this interim stage rather than immediate binding contracts.

Buyers can potentially withdraw or renegotiate which causes uncertainty for sellers.

Delays and issues with surveys, mortgages etc. may kill the sale even at a late stage.

Buyers may make ‘cheeky’ low offers if they know the seller has agreed on an STC price.

This creates a risk of gazumping if an agent continues marketing after STC agrees.

Overall the sold STC system seems well suited to the UK market. It strikes a balance between securing a buyer and sale price while allowing breathing space to tie up legalities before exchanging. For sellers, it can be an anxious wait until the exchange finally occurs. But ultimately it helps facilitate many thousands of successful sales each year.

sold STC meaning: ‘Sold subject to contract’ – this means an offer has been made and verbally agreed, upon but is not yet legally binding.

To Conclude

The journey from listing a property to final completion involves many hurdles along the way. Securing ‘sold STC’ status marks a major step forward in this process. It signifies the point where a verbal agreement has been reached on price and intent to purchase.

However, sold STC does not provide full security for either the buyer or seller. The buyer may still withdraw during the pre-exchange phase if issues arise with the property, finances or other reasons. The seller remains uncertain until a binding contract has been signed.

During the STC period, the buyer undertakes due diligence such as surveys, mortgage applications and conveyancing work. The seller is reliant on the buyer satisfactorily completing these steps in order to progress. Delays or problems could derail the sale.

The STC system strikes a good balance in the UK market between securing a buyer and allowing breathing space to complete legal work. But the seller in particular faces some anxious weeks before the exchange occurs. Effective communication between both parties helps minimise uncertainty.

Securing STC status is certainly a milestone worth celebrating as it cements intent to purchase. But it does not guarantee a done deal. Careful follow-through is required from both buyer and seller to get safely to the exchange of contracts when the transaction becomes legally binding.

Completion day remains the ultimate goal that finally transfers legal ownership. While STC represents strong progress, there is still work ahead through the pre-exchange period to ensure the sale is completed successfully.

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