What does STC mean for home buyers and sellers?
If you’re searching for the perfect home, you’ve probably come across the term ‘Sold STC’. You may wonder if the property is now off-limits to you as a buyer.
Or you may be selling your home and want to know if changing your status to ‘Sold STC’ means you can’t accept a different offer.
To increase your chances of either securing the property you want or getting the highest price possible for yours, you need to understand the meaning of the term ‘Sold STC’ and the implications for both buyers and sellers.
What does Sold STC mean?
‘Sold STC’ stands for ‘sold subject to contract’. This means the following:
- The owners of the property have accepted an offer
- The owners intend to sell their property to the buyer who made this offer
So, at this point, the property owners have found an offer they like and have verbally committed to selling the property.
The ‘subject to contract’ part is key – it means that the sale will only be final once the contracts have been drawn up and exchanged.
Is ‘Sold STC’ the same as ‘Sale Agreed’?
Yes – the terminology may be different, but ‘Sold STC’ is essentially the same as ‘Sale Agreed’. Different agents tend to favour one or the other, but they both mean the same thing.
What does STC mean for home buyers?
If you have found a home you love, and are determined to make it yours, seeing ‘Sold STC’ against the listing is not exactly good news.
This is because, as previously mentioned, seeing ‘Sold STC’ means that the property owners have verbally agreed to sell the property to another party. This would imply they’ve either received an offer they’re pleased with or are keen to move as soon as possible, so they have accepted the best offer they received.
What does STC mean for home sellers?
If you’re selling your home, you will also encounter the term ‘Sold STC’.
This phrase will appear towards the end of your home-selling journey. Once you accept an offer, your estate agent will most likely change the status of your property to ‘Sold STC’ on the listing, which will indicate to other potential buyers your intention to sell to a particular party.
Does ‘Sold STC’ mean off the market?
No. It’s important to know that your property changing status to ‘Sold STC’ on the listing does not remove it from the market. It will still appear in search results and will be visible to potential buyers.
At any time, up until the exchange of contracts, it’s perfectly legal for the seller to accept a higher offer and pull out of the original offer.
Can I still make an offer on a property that’s ‘Sold STC’?
Yes. If you’re a buyer, there is technically nothing stopping you from making an offer on a property that’s ‘Sold STC’.
Despite ‘Sold STC’ meaning there is a verbal contract in place between the property owner and a potential buyer, there has yet to be anything legal in place at the 'Sold STC' stage.
In England, a home sale is only legally binding once the buyer and seller’s solicitors have exchanged contracts. So, in theory, a home that is only ‘Sold STC’ is still open for offers.
Making a higher offer on a home that’s already listed as ‘under offer’, ‘Sale Agreed’ or ‘Sold STC’ is known as gazumping. It’s a controversial practice, with many believing it should be made illegal due to the negative financial impact it usually has on the original buyer.
Should I gazump another buyer?
It's entirely up to you whether you choose to gazump another buyer by making an offer on a property that's 'Sold STC'. There's no law against it, and the seller will most likely want to get the highest price possible for their home.
The only person who loses out in gazumping is the party who had their offer accepted originally. This is because once their offer is accepted, they begin hiring solicitors, booking surveyors and paying mortgage arrangement fees.
This leaves the buyer not only having to swallow the disappointment of losing their dream home, but also a couple of thousand out of pocket (unless they’ve taken out Home Buyers Protection Insurance which would enable them to reclaim the upfront costs they’ve already spent on the sale).
Why would a property go from ‘Sold STC’ to ‘For Sale’?
Many things can happen to a house sale between the 'Sold STC' stage and the property being legally sold. These include:
If a property states ‘Sold STC’, it generally means the conveyancing process has begun behind the scenes. This is the process of transferring the legal ownership of the property from the previous owners to the buyer.
Conveyancing also includes Local Authority Searches, which can discover information about the property that might cause the buyer to withdraw. This includes boundary disputes, environmental hazards and planning proposals.
Home survey surprises
‘Sold STC’ also means the buyer will have arranged a home survey on the property.
If the home survey discovers that the property's condition is different from first expected, it could cause the buyer to pull out or significantly reduce their offer.
Mortgage arrangement issues
The potential buyer may have made an offer without an agreement in principle in place from a mortgage lender. If so, their mortgage might not be approved, meaning they can not purchase the property. Even if the buyer does have a mortgage agreement in principle, the final application isn’t guaranteed to go through.
Seller goes with a higher offer
The buyer could be gazumped – which means the seller has accepted a higher offer after agreeing to sell to them. Gazumping has a lousy reputation in home buying and selling, but is relatively common and thought to be on the rise. As a buyer, the only way to protect yourself from the financial fallout caused by gazumping is to take out gazumping insurance.