You may see the phrase ‘sold subject to contract’ on a sign outside a property or next to a home that's listed online.
It shows that a buyer has had their offer informally accepted by the seller. But nothing is legally binding at this stage.
It's actually when the hard graft begins on the buyer's side, as surveyors and solicitors are brought in to check everything's ok with the property, while they get their mortgage agreed with their lender.
A survey is done to check everything's in working order and as it should be.
A solicitor starts carrying out all of the relevant searches needed for the property transaction.
While all of this is going on - and the process can take around six to 12 weeks - no contracts have been signed.
In short, the sale isn't binding and there’s no guarantee that it will go ahead.
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What’s the difference between ‘under offer’ and ‘sold STC’?
Under offer means that a buyer has made an offer and the seller has either accepted it - or in some cases is still deciding whether to accept it or not.
Sold subject to contract, or sold STC, means that the buyer has made an offer and the seller has accepted it.
But in either case, until the paperwork is completed and the contracts are exchanged – neither the buyer or seller are legally committed to the sale.
What's the difference between exchange and completion?
How long does it take to go from sold STC to a completed sale?
There are many different factors involved in buying a home. So it’s no surprise that the length of time it takes for a home to go from ‘sold subject to contract’ to legally sold varies.
Generally, the time that it takes to buy a home is six to 12 weeks, but it can take up to six months.
The longest part of the process is usually the conveyancing part, where the solicitor needs to get in touch with lots of third parties to check there aren't any risks to the property.
Those risks could involve planning developments for new roads or buildings, alongside things like flood risks and water mains connections.
Find out more about the searches involved when buying a house.
But there are things you can do to help speed up the process: make sure you have your mortgage agreement in principle before making an offer, and have a good solicitor and surveyor lined up so they're ready to go once you've found your dream pad.
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The sale becomes legally binding once the buyer and seller exchange contracts.
From that point, completion - the bit where you finally get the keys to your new place - can take anything from one day to two weeks.
It’s worth remembering that the process of buying a home is slightly different in Scotland.
If the seller agrees to sell their home to the buyer, their solicitor will send a letter accepting the offer depending on certain conditions.
Solicitors for both sides will then send each other letters, known as ‘missives’, negotiating the conditions. Once that process has finished, there's a binding contract.
Why buying a home in Scotland is different to in England and Wales
What are the chances of a property sold STC falling through?
If a property is sold STC, that means there's an informal agreement in place, so either side can still pull out.
You're free to make enquiries about a property that is ‘sold subject to contract’ and put in an offer of your own.
If the seller accepts it, you’d be gazumping the original buyer.
On the flipside, even if you've had your offer accepted, you can still be gazumped by someone else.
There are steps you can take to minimise the chances of it happening. They include:
keeping the buying process moving quickly
asking the seller to take the property off the market
requesting an exclusivity agreement where the seller doesn’t seek, or accept, offers from other buyers for a period of time.
Find out what you can do to avoid being gazumped.
You could also take out Home Buyers Protection Insurance.
While it won’t reduce the risk of being gazumped, it will offer you protection if you are.
Of course, there are other reasons why your purchase may fall through:
the seller may change their mind and take the property off the market
the lender may decide they're not willing to lend the funds
the property survey may highlight some issues, prompting you to withdraw your offer – or the lender to withdraw their mortgage offer
the local searches may reveal something that makes you decide to pull out.
It’s only when the contracts have been exchanged that everyone can truly breathe a sigh of relief.
Completion, when the property changes hands, is the final stage of buying a home. Then it's time to crack out the champers.
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