Published: 05/08/2022What does Subject to Contract (STC) mean?
Sold 'Subject to Contract' means an offer has been put forward and verbally accepted by the Seller, but no legal paperwork to bind the sale has been processed. Sales may fall through at this point when issues emerge, be it something unexpected in the survey report or the Buyer or Seller has a change of heart.
What does STC mean for the Seller?
When an offer has been put forward and accepted, the property becomes Sold STC. The listing may be removed from the market and marked accordingly on the agent's website and the property portals. However, the property isn't completely removed and is still visible to other prospective buyers. Moving to the 'Sold STC' stage' is a status update rather than complete removal.
It's at this point that the solicitors begin the conveyancing process. i.e., the legal procedures involved in transferring the ownership, including the Seller providing as much information as possible, questions about the property, and the Buyer's ensuring that their client is getting what is expected. All parties work together to complete the transfer of ownership from here on. At this point, either party may still pull out of the sale, as no legally binding commitment has yet been made, or a new buyer may come along and make a higher offer, which the Seller then accepts; this is known as "gazumping."
What does STC mean for the Buyer?
Solicitor and surveyor will report to the Buyer before asking them to sign contracts. The relevant information is collated purporting to the sale; the mortgage is finalised, and the solicitor arranges searches and raises any queries regarding the title, the property, or the contract. A survey may be arranged to check if there's anything untoward about the physical aspect of the property that isn't already known. The Buyer needs to be 100% sure they wish to proceed and have no outstanding concerns because once the signed agreements have been exchanged between solicitors, a legally binding contract has been made between Buyer and Seller.
There is often a mountain of information and associated paperwork involved, and one of the most important aspects of the agent's job is to try and ensure that information flows between the parties and assist in ensuring it is provided by any outside source, such as the Managing Agents of the building or the local authority.
Although it's a nerve-wracking process, it's designed to allow everyone to get all their ducks in a row before making the final commitment. It works well for the Sellers, but it also works for the Buyers, giving them the option to change their minds should the survey throw up any serious problems or the lease contains some seriously onerous clauses. It's important to remember that the Sold STC stage of a property sale ensures the transaction is correct for everyone before proceeding to the legally binding exchange of contracts.
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