What does SSTC mean? Sold subject to contract explained

When you're buying or selling a house, the various people that you have to deal with - conveyancing solicitors, estate agents, surveyors, mortgage lenders, and others - can have a tendency to slip into jargon that means something to them but might be mystifying to you.

If you don't understand something and it isn't clarified for you, it can lead to assumptions being made - and result in potential problems further down the line.

One of the terms that you often see on an estate agent's board is Sold Subject to Contract (or its common abbreviation SSTC - or even Sold STC.

Here is Homeward Legal's guide to the use of this terminology.

In terms of the process and your position in it, the phrase means exactly what it says: The seller has agreed an offer with their putative buyer and both parties enter into the phase of preparing the contracts to establish the details pertaining to the sale and purchase.

Quite often, the estate agent board will have the word “sold” in large, bold lettering, with the much smaller caveat “STC”. A quick glance at the board as you pass by registers only the word “sold”, because the agency wants to look successful in moving properties on.

There is no subterfuge involved here because no-one is being undersold or oversold on what is going on with the property - while it helps to underline an estate agent's success to have the word “sold” appearing on the board outside the property, it's also an indication that the property is off the books for sale.

According to The Property Ombudsman, the terms “sold subject to contract”, “under offer” and “sale agreed” are synonymous and can be used interchangeably, even though the terms seem to be suggesting slightly different things. If you are at all uncertain, then you should raise the question either with your estate agent or your conveyancing solicitor.

The key point is that, if the property you are planning on buying is highlighted as “sold subject to contract”, you are not yet legally obliged to continue with the sale either as the seller or the buyer. 

Indeed, other buyers may yet come along and put in an offer with the agent and seller that effectively prices you out of the sale, a process known as gazumping - this undesirable practice is usually heavily frowned upon by the estate agency.

However, a critical point to note is that if an estate agent does receive any further offers, they are legally obliged to pass them on to the seller. Whether or not the seller then decides to accept one of those different offers, thereby gazumping you, is completely within their control.

Strictly speaking, once the property has an agreed price offer between seller and buyer, the estate agent should take the property off the market to limit the possibility of further offers enticing the seller into a new agreement. 

Equally, you might find that you need to renegotiate the formerly agreed price because of something that has been identified in the report from your chartered surveyor. 

Further, you still have the choice to back out of the purchase or sale at any point prior to the exchange of contracts.

Effectively, a property that is SSTC means that there is an informal (i.e. not legally enforceable) agreement in place, which usually means the sale will proceed as planned.

Assuming the property is taken off the market and there is little likelihood of being gazumped, your conveyancing solicitor will make the latest enquiries and searches to confirm that everything is in place for you to purchase or sell the property and the legal transfer of ownership at completion. 

As part of the process, the solicitor will draw up the contract in preparation for the milestone where the contracts are exchanged with the corresponding conveyancer.

There is no set time period between the property being confirmed as “sold subject to contract” and the exchange of contracts but be prepared for it to take some time. All the legal processes must be completed to ensure no problems are likely to surface once you are in a position to sign and exchange the contracts - from that point on you are legally obliged to continue with the sale or purchase, which underlines the importance of getting everything correct in the document.

As a rule of thumb, you should expect this process to take between six weeks and three months, although be prepared for the possibility that it will take longer. Your conveyancing solicitor will keep you informed of the status, but don't be afraid to ask for status and information.

Make it clear from the outset, too, how you would like to communicate issues and progress and the expected intervals for that information to be given to you. 

Because the seller may decide quite late in the process to accept a higher offer, therefore taking you off the sale - i.e. gazumping you - you might find that you have already invested considerable money into your planned purchase already. 

It therefore makes sense, particularly in a volatile market, to consider taking out homebuyers insurance to protect you. Additionally, you can ask for information from the estate agent as to the likelihood of gazumping occurring.

You can also protect yourself from incurring legal fees accrued to the point where your seller backed out of the process by choosing a conveyancing firm that offers a “no completion, no fee” guarantee regardless of where you are in the process and for whatever reason.

When you're planning on buying or selling a home, you need to protect yourself as much as you can, which is why you should appoint a solicitor with Homeward Legal, because we guarantee that if your transaction falls apart for any reason, you won't have to pay any of the solicitor's fees that have been accrued to date.

The experts at Homeward Legal are well-versed in all aspects of the conveyancing process, providing a quality service at a fee that is great value for money!

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to purchase or sell your home.