What Does Sold Subject To Contract (SSTC) mean?

In the realm of property sales, there are numerous abbreviations and acronyms that can often leave potential buyers or sellers feeling somewhat perplexed. One such acronym is SSTC, which you may frequently encounter when browsing property listings. This article aims to demystify the term SSTC, providing a comprehensive understanding of its meaning, implications, and relevance in the property market.

What Does Sold Subject To Contract (SSTC) mean?

The acronym SSTC stands for 'Sold Subject To Contract'. This term is commonly used in the United Kingdom and other countries that follow similar property transaction processes. It is a crucial phrase that signifies a significant stage in the property selling process.

When a property is marked as SSTC, it means that the seller has accepted an offer from a potential buyer, but the legalities of the sale are yet to be completed. The 'subject to contract' part of SSTC indicates that the agreement between the buyer and seller is not legally binding until the contracts have been exchanged.

Understanding the implications of SSTC is vital for both buyers and sellers.

What does SSTC Mean for the seller?

For sellers, sold STC means they have accepted an offer from a buyer. Marking a property as SSTC can deter other potential buyers, as it indicates that an offer has been accepted. However, it's important to note that until the contracts are exchanged, the sale is not finalised and can still fall through. Once the property is marked as 'Sold Subject to Contract' (SSTC), you can proceed to instruct your solicitor to start the conveyancing process,

What does SSTC Mean for the Buyer?

For buyers, seeing a property listed as SSTC can be disheartening, as it suggests that they have missed out on the property. However, since the sale is not legally binding at this stage, there is still a chance that the property could come back on the market if the sale falls through.

We advise buyers push their estate agent to swiftly label the property as 'Sold Subject to Contract' (SSTC). This will reduce or remove the listing's presence on property websites, deterring further interest. Such a measure helps to guard against the risk of being outbid or 'gazumped' by another buyer.

What Happens After a Property Is SSTC?

Acceptance of Offer

The SSTC process begins when a seller accepts an offer from a buyer. This acceptance is usually a verbal agreement  and is followed by the property being marked as SSTC or Sold STC on property listings. However, this acceptance does not legally bind the seller to sell the property to the buyer.

Preparation of Contracts

Following the acceptance of the offer, the seller's solicitor or conveyancer will prepare the contract for the sale. This contract will detail the terms of the sale, including the agreed price, the property's boundaries, and any fixtures and fittings included in the sale.

Exchange of Contracts

The final stage in the SSTC process is the exchange of contracts. This is when the sale becomes legally binding. Both the buyer and seller will sign their respective copies of the contract, which are then swapped or 'exchanged' by their solicitors or conveyancers. At this point, the property is no longer considered SSTC, but sold.

Gazumping and Gazundering

In the context of SSTC, it's important to understand the concepts of gazumping and gazundering. Gazumping occurs when a seller accepts a higher offer from a different buyer after having already accepted an offer. This can happen because the sale is not legally binding until contracts are exchanged.

Gazundering, on the other hand, is when a buyer lowers their offer just before the contracts are exchanged. This can put the seller in a difficult position, as they may have to accept the lower offer or risk the sale falling through.

Conclusion

In conclusion, SSTC is a significant term in the property market, indicating that a property is in the process of being sold, but the sale is not yet legally binding. Understanding the meaning and implications of SSTC can help both buyers and sellers navigate the property market more effectively.

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