‘Sold STC’ Meaning

Sold STC Meaning

What Does Sold STC Mean?

A property marked as Sold STC (Subject to Contract) means that an offer has been accepted and the estate agent has taken it off the market – but contracts have not yet exchanged.

You’ll mainly see this notification on estate agency boards and online portals.  It’s also a good indicator of where your local house market is at (many Sold STC signs are often a sign that sales are buoyant).

Prior to changing an advertised property to Sold STC, the estate agent should have undertaken the following checks and processes:

  • Confirmed that the seller accepts the buyer’s offer, usually by email;
  • Confirmed the names and contact details of the buyer’s and seller’s conveyancing solicitors;
  • Established an approximate date for exchange and completion;
  • Confirmed the HM Land Registry number (although this should be in place when the seller instructs the agent);
  • Explored whether the buyer is in a chain and, if so, what stage in the conveyancing process the other ongoing sale(s) is/are;
  • Confirmed who the buyer’s lender is and that a valid Decision in Principle (DIP) / mortgage offer (in the last 2 months) is in place;
  • Confirmed the deposit the buyer is putting down. This needs to correlate with the  figure on the mortgage Decision in Principle.  Note that these last 2 points are referred to as providing “proof of funds”;
  • Verified recent bank statements should the buyer wish to proceed with a 100% cash purchase;
  • Advised all parties of any special conditions of sale / anticipated legal questions (and confirmed agreement to proceed);
  • Confirmed that the buyer’s solicitor has undertaken Anti Money Laundering (AML) checks;
  • Assisted the seller to forward any relevant documentation to the solicitor (leases, existing supplementary contracts, building regulation certificates, etc.).

How a Property Becomes Sold STC

How a Property Becomes Sold STCHow a Property Becomes Sold STC

  • Buyers make their final offers (after viewings and negotiations);
  • The estate agent verifies the credentials of each buyer and liaises with the seller;
  • It’s then up to the seller to decide which offer seems the most concrete and proceedable;
  • The estate agent can mark the property as Sold STC and the transaction process (legals, surveys, mortgage arrangement etc.) can begin.

What Happens After a Property Changes as Sold STC?

Following the above confirmations, the estate agent or auction house will draft a Memorandum of Sale.  The estate agent will subsequently delist the property and the transactional process begins.

The buyer and seller instruct conveyancers or conveyancing solicitors to deal with all the legal aspects of the sale.  They will liaise between themselves and deal with any enquiries prior to drawing up contracts.

Sold STC will be tagged on the portals such as Rightmove, Zoopla and On The Market as well as the agent’s own website.  The estate agent will also change the slip on the mounted board outside the property.

Many buyers will also set in motion the mortgage finance (unless it is a cash purchase) process.  This starts with organising a RICS survey and undertaking the other related steps (which the solicitor, estate agent and mortgage broker will manage).  The buyer’s solicitor will also deal with the mortgage lender’s enquiries prior to drafting the contractual documentation.

After what is usually between 2 and 6 months, the parties sign and witness their respective contracts and the sale completes.  The estate agent can then mark the property as ‘Sold’.

Difference Between Sold STC and Under Offer

Whilst Sold STC and Under Offer are often used interchangeably, there are crucial differences.

Although a property marked as Sold STC is off the market, the seller can theoretically still accept offers.  However, in reality, this is unlikely to happen as both parties want the sale to happen (see below).

A house Under Offer means that the seller has not confirmed acceptance of the price.  Even though many buyers and sellers believe that the property sale is ‘closed off’, the agent can (and often does) receive other offers.  Indeed, there is nothing wrong with a seller rejecting an initial offer if something better has come to the table.

Practically speaking, assuming there is a decent amount of interest, the agent should first mark the property as ‘Under Offer’ whilst the seller considers the offers.  Only once all the relevant checks have been done and the seller is happy to proceed with the final offer, the property can be changed to Sold STC.

If there has not been as much interest in the property but an offer comes through that ticks all the boxes, the agent can change the listing straight to Sold STC.

Difference Between Sold STC and Under Offer

Straight to Sold (with No ‘Subject to Contract’)

It’s worth noting that, with our property auctions, we would usually change the property to Sold (without the tag ‘subject to contract’).

This is because the fall of the auction hammer (gavel) effectively means an exchange of contracts.  At this juncture, buyers will typically pay a 10% deposit of the agreed sale price.

Withdrawing at this stage could not only mean losing this sum of money but also other heavy financial penalties. In short, the property is as good as sold (which is why many sellers like auctions for the extra security it brings).

When a Property Marked as Sold STC May Actually Not Be…

On some occasions, often at the request of the seller, the agent may mark the property as Sold STC even though a price has not been accepted.

These reasons could include:

  • The seller is in a chain and wants to show that things are moving forward;
  • The buyer is from overseas and further checks need to be made – but the seller still wishes to proceed;
  • The seller is getting contacted by buyers knocking at the door wanting to discuss an offer;
  • Mortgage companies and/or secured debtors request for the change to the listing;
  • Companies selling properties request for the listing change (due to a variety of internal objectives);
  • If this is a private house sale, sellers often also sometimes change their properties to Sold STC if they are inundated with interest.

When a Property Marked as Sold STC May Actually Not Be

Here at Property Solvers, whilst we always like to have as many properties marked in this way, we would often discourage changing until we have undertaken all the checks.

A property returning to a For Sale status – even though unjustifiable in many cases – tends to give mixed messages that it’s somewhat tainted.

Can You Offer on a Property That's Sold STC?

Yes – as a buyer, there’s no legal reason why you cannot offer on a property that’s Sold STC.

Estate agents in England and Wales are legally obliged to pass on such offers right up to the point of exchange of contracts.

In all likelihood, however, any offer below what the seller has accepted will be rejected (unless it’s from a quick cash homebuyer).

What’s more, any offer that’s higher than the agreed price is effectively gazumping the sale and is widely deemed as an unscrupulous practice.  The seller may well accept, but you’re effectively pushing out the original buyer who will already be spending money on conveyancing and surveys.

When Property Solvers receive calls from gazumping-intentioned buyers, we tend not to divulge too much information pertaining to the sale.  We would simply pass the offer on to the seller and – as the law requires – take an impartial stance.

However, it’s natural for sellers to be open to other offers if the buyer is playing unnecessary games or not responding to phone calls / emails within reasonable timeframes.  We often see buyers struggling to get mortgages as another issue.  Sellers often prefer cash buyers or those that have the means to exchange and complete the sale quicker.

In short, if the buyer is not performing, the seller may feel more open to propositions. As agents, we therefore keep a list of prospective buyers who have expressed an interest in the property as a backup plan.

Home Buyers Protection Insurance
As a buyer, if there’s concern about gazumping, it’s worth taking home buyers protection insurance to cover your costs should the sale fall apart.

Can a Property Marked as 'Sold STC' Fall Through?

If you’ve seen a property you love that’s indicated as Sold Subject to Contract, you may think that there’s no point in pursuing it further.

Although both parties usually want things to go smoothly, a series of issues can occur during the transaction that results in either the seller withdrawing completely or – more commonly – the property going back onto the market.

Indeed, at any given time in the market cycle, 1 in 3 house sales collapse.

Issues with Conveyancing Process (Transfer of Ownership)

Issues with Conveyancing Process (Transfer of Ownership)

One of the initial stages of the conveyancing process requires the seller to complete the following Law Society forms:

  • TA6: Property Information
  • TA10: Fixtures & Contents
  • TA7: Leasehold Information (for a flat / apartment sale usually).

The seller will also need to send through identification, warranties, guarantees, planning permission documentation, building regulation approvals and other relevant certifications.

The buyer’s solicitor will raise enquiries which, on occasion, create problems that the seller’s side chooses to flag.  Whilst most experienced conveyancers know how to guide their clients in the right way, sometimes we see buyers get cold feet as a result of issues that make them uncomfortable with proceeding.

Sellers, on the other hand, feel frustrated with unnecessary delays and a lack of proactivity on the part of the buyer’s solicitor.  This often is due to the buyer using a low fee conveyancing practice that has probably taken on too much work.

Here, much will depend on the buyer’s eagerness to push things forward, either by swapping firms (which will delay things even further) or directly chasing the solicitor.  Usually, a few phone calls / emails deals with the situation.  The estate agent should also help with any issues.

However, if both the parties are not on the same page – rather than waste any more time – it makes sense for the property to return to the market (changing Sold STC to For Sale).

Down Valuation for Mortgage Purposes

Down Valuation for Mortgage Purposes

Mortgage companies will request a basic survey that will confirm the sale price of the property is in line with the reality of the market and its overall condition.

Down valuations can happen after the estate agent has edged up the asking price too aggressively (to win the initial business) and/or allowed the bidding to get out of hand.

In such scenarios, the seller may be willing to accept the lower price or request a valuation appeal.

Or, if the buyer is particularly keen to proceed, he/she may be willing to fund the difference (i.e. pay more of a deposit).  If both parties cannot reach an agreement, however, the sale may fall apart.

We also see situations where the estate agent has not verified the total level of mortgage debt against the property – meaning the seller is effectively in negative equity. For example, credit card debt may have been converted to secured debt unbeknownst to the seller.

Again, this leaves the following possibilities:

  • Renegotiate the price higher (unlikely)
  • The seller finds the money to clear the extra mortgage debt
  • There is a complete withdrawal of the sale
  • The property will return to the market at a higher price (tricky but not impossible).

Issues with the Home Survey

Issues with the Home Survey

Mortgage surveys tend not to have too much detail to them and, as a result, many buyers choose to also instruct a Level 3 RICS Home Survey.

Here complications could appear if the surveyor detects physical issues with the property.  This is likely to be the case if the building is older or run-down.

Much will depend on the extent of the problem and the associated cost of resolution.  A few repairs or replacements, for example, is not usually an issue.  The seller can sort things out prior to exchange and completion (often as a condition of sale).

There should not be too much of an issue if the problems were disclosed and initially ‘priced in’ to the sale price.  The buyer will rarely kick up a fuss if the surveyor agrees with the sales price despite the flagged issues.

On the other hand, if there are more costly issues that could effectively render the property unmortgageable, buyers may wish to renegotiate the price.

The sellers can reject the revised offer and put the property back on the open market if they feel confident about getting a better price.

Issues with Searches

Issues with Searches

At the start of the conveyancing process, the buyer will transfer funds into the solicitor’s account for conveyancing searches – a series of checks sent back from public bodies and local authorities.

The most common searches are:

  • Title Register and Plan Search
  • Epitome of Title
  • Local Authority Search (which takes the longest)
  • Environmental Search
  • Flood Risk Search
  • Water Search
  • Drainage Search
  • Boundary Search
  • Commons Registration
  • Land Charges Search
  • Chancel Repair Search
  • Canal and River Search
  • Mining Search
  • Solar Panels
  • Planning Search
  • Developer Legal Searches (for part-exchange transactions, for example)

Much here would depend on the extent of any issues that emerge. A good conveyancer can point you in the right direction here

Your solicitor can also on indemnity insurance policies that cover most scenarios.

Issues with the Chain

Issues with the Chain

A property in a chain (especially a long one) often causes complexity – despite all the buyers and sellers involved being keen for the sale to proceed.

There can be due to a number of reasons from mortgage issues or struggling to find deposit funds to realisation that a capital gains tax liability may be due upon sale (typically of a second property).

Indeed, all it takes is for one sale to collapse to affect everyone in the chain. That’s why having no onward chain is the best place to be in as it effectively means that multiple sales are not dependent on each other.

Some sellers or buyers may simply decide to withdraw the sale from the chain.  However, if the sale is close to completing and the estate agents are chasing progress regularly, there shouldn’t be too many issues.

Communication is key to ensuring all parties are on the same page. Indeed – with chains being fairly common with high-value properties transactions – it’s often in the best interest of all involved to keep the sale on track.

How to Quickly Get from Sold STC to Complete

A successful house sale requires buyers, sellers, their respective solicitors, mortgage brokers, and the estate agent to work proactively and cooperatively.

In order to ensure the quickest possible sale, much will depend on avoiding the issues highlighted above.

We’ve seen open market sales take anything from 2 to up to 10 months.

Speed of House Sale Tool
Check out our free speed of sale tool which tracks the time it takes from listing to completion in your area.

There are, however a series of steps worth taking to help things along and minimise the total sales time.

Property Sellers

  • Register with the conveyancer / conveyancing solicitor in good time;
  • Complete the relevant Law Society forms so that the details can be sent straight away;
  • Make sure the solicitor has experience processing house sale transactions quickly (contact Property Solvers’ legal partners here);
  • Ensure that the estate agent has undertaken all the necessary buyer checks prior to agreeing to proceed;
  • Don’t be afraid to ask the estate agent to ask for help.  Remember you are paying their fees and they have a responsibility to get things done;
  • Consider selling at auction in order to secure a buyer once the hammer (or gavel) falls;
  • You may be able to request an exclusivity agreement to secure the sale within a set timeframe;
  • Bypass the hassles that come with an open market sale completely by using home buying company like Property Solvers.  We’ll make a direct offer and there will be no estate agency or legal fees to pay.  From the moment you agree to sell to us, we’ll handle everything. We can also offer 0% interest-free cash advances should you need money immediately.

Property Buyers

  • Ensure you’re working with an experienced and, crucially, fast conveyancer;
  • Make sure you have fully instructed your selected legal representative well in advance;
  • Send through certified ID and undergoing Know Your Client / AML checks;
  • Anticipate potential issues that typically appear during the conveyancing process;
  • Try and be as close to completion as possible on any ongoing sales to avoid any chain-related complications
  • It’s worth asking a mortgage broker about your lender’s underwriting process.  Some work faster than others
  • Make sure you have proof of deposit or cash funds (via bank statements within the last month).  The higher the deposit you have in place, the better
  • Always be available by phone and/or email to deal with any issues.  If you’re busy, it’s worth seeing if you can find a husband/wife, partner or trusted third party to help.

Going from Sold STC to SOLD (Completed)

On This Page