How To Put an Offer on a House that is SSTC
Under every “Sold” property sign across the UK is often one simple acronym – SSTC. It stands for Sold Subject to Contract, and it’s a confusing one for both buyers and sellers alike. Knowing the sold subject to contract meaning and the process after SSTC is a must, though, because it is estimated that two out of every three properties sit in the SSTC stage for quite a bit longer than you would imagine.
What Does Sold Subject to Contract Mean?
SSTC, or Sold Subject to Contract, means that a buyer has come along and made an offer on the property. That offer has been accepted by the seller. At this point, however, the agreement between the two parties is just a verbal one. No money has changed hands, and the conveyancing solicitors either haven’t stepped in or have just begun to step into the process.
Agreeing to sell your home is not a legally binding process. The sale isn’t required by law on a home in the UK until the contracts have been exchanged, and that doesn’t happen until quite a bit later in the overall home sales process.
So, what does sold subject to contract mean for the buyer? Once the agreement becomes an SSTC, it automatically becomes time to finalise the mortgage proceedings. Even if you have already been in contact with a bank or been preapproved for a mortgage, finalising the process is a must once you’ve agreed to buy a home. It’s also time to organise searches and a survey to ensure nothing serious is wrong with the property. Usually, your estate agent can help you organise that survey. Should it turn up any serious problems, you still have the opportunity to back out at this point. You can even just try to renegotiate the terms of the agreement if there are problems but you still want to buy the home.
For the seller, entering SSTC means having your home’s listing removed from most listing websites. In some cases, your home’s listing will remain, but the SSTC acronym will be added to it. You’ll need to make sure you get the buyer’s proof of funds at this point. You’ll also need to begin working with a conveyancing solicitor to ensure that everything is moving along as it should be so you can transfer ownership of the property.
Do SSTC Properties Always Sell?
When you reach SSTC, you may breathe a sigh of relief, but it’s not quite time to do that yet. Not all SSTC properties actually sell. The sale can fall through for many different reasons. One of the biggest is the buyer’s financing falls through. If the buyer wasn’t preapproved for a mortgage or that mortgage expires, the lender may not issue the funding needed for the property, which could make the sale fall apart entirely. Likewise, if the home valuation isn’t for the right amount, a lender may choose not to make the loan, leading the deal to fall apart entirely.
Survey issues are another reason SSTC properties don’t actually move forward to a completed sale. A home survey can reveal lots of potential problems with a property. From outdated plumbing and electrical problems to serious foundation issues, a home survey may be the downfall of the sale. It’s designed to help buyers truly understand the property they’re getting, but if it reveals issues, buyers may choose to back out of the sale. Even if they don’t, they may ask for a much lower price than the seller can take, and that can cause the sale to fall apart at this stage.
Housing chain problems are another reason sales fall apart at this stage. Often a property chain is created when the seller goes to buy a new house before his or her current house is sold. That can be true for the buyer as well. If any one of those chains collapse or the paperwork takes too long, it’s possible that even an SSTC deal won’t go through. Which? Suggested that one in every five property deals actually doesn’t reach completion because of property chain issues, so it’s certainly something to consider before you accept a buyer’s offer.
When the buyer and the seller officially exchange contracts, a home leaves SSTC. The sale has officially come together, and everything is legally binding at that point. The details are defined by the solicitors, and everyone knows the official date of completion. Typically the buyer will make a deposit of up to 10% on the property at that point, and should anyone need to back out, they would be in legal breach of contract, which would mean the seller could keep the buyer’s deposit.
Why Understanding SSTC Matters
SSTC is a frustrating place to be for both buyers and sellers. You’ve both reached a stage where you’re sure the deal is about to happen, yet legally, nothing is happening. If the home you are buying or selling is in SSTC, but nothing’s happening, reach out to your estate agent or conveyancing solicitor to get a better understanding of the timeline involved in your case.