What does 'Sold Subject to Contract' mean when buying a property?

Find out what Sold Subject to Contract means when you are buying a property. 'What does Sold Subject to Contract mean?' plus over 150 other property related terms and jargon in plain English

Sold Subject to Contract

Once an offer is agreed on a property it is referred to as "sold subject to a contract" or "Sold STC" until legal ownership is fully transferred.

The "contract" is a document which contains:

  • Who the vendor is
  • Who the buyer is
  • What the property is
  • The date on which ownership will be transferred
  • The price the buyer will pay the vendor

The sale only becomes legally binding on both buyer and seller when they have both signed the contract and both have given each other a copy - known as "Exchanging Contracts".

Exchange of contracts can only happen when a number of checks have been carried out - everything from checking if the seller has the right to sell the property to any requirements your mortgage lender may have such as a valuation survey.

As such even after you have had your offer accepted the property is only ever sold "subject to the contract being signed" and that may take several weeks to organize.

However, and slightly confusing, even after both the vendor and you have signed your contracts and exchanged them the property is still referred to as "Sold Subject to Contract".

This is because exchange is not usually the moment that the property ownership changes. It is just the time you agree, and it becomes legally binding, when the property ownership will change.

At exchange you will also normally pay a deposit (5 or 10% of the property price) which means you still have the balance to pay. This is also written into the contract.

So after exchange you have moved from "subject to the contract being signed" to "subject to the contract being carried out" but both are simply referred to as "Subject to Contract" or STC.

To learn all the lingo involved when purchasing a property pick up a copy of my ebook How to Really Buy a Property.


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"... investment company blamed an unusual and unexpected number of properties on the market to rent was the reason he could not now get the yield they had promised in their literature and that there had been a temporary dip in the areas prices which they could not have foreseen. There was nothing in his contract with them that guaranteed anything within the sales brochures so there was nothing he could..."

"... with Loan Companies - These are not unusual and you may have gone to court and won the day. Many people do when the creditor puts unusual clauses in very small print within the contract. But to the lender you are now applying it means you may be trouble - rightly or wrongly - and they could take a negative view on your application for this reason..."
"... and crucially check early with each lender or financial adviser what documentation they will require and organise it now. Discovering you have lost your passport and need to order six months worth of bank statements is going to be of no interest to a vendor when you are in a contract race or competing in sealed..."

"... (see Chapter 19: Time Costs Deals). An efficient solicitor who knows this should work as follows: Receives contract and title deeds (or office copy entries) and starts the local searches As soon as the sellers questionnaire, fixtures and fittings form and managing agents accounts (in the..."
"... searches come back, perhaps prompting a couple of queries, which can be resolved quickly He asks you for the funds to allow exchange and gets you to sign the contract, even before all enquires are back The mortgage offer arrives He calls you, informs you of any unusual circumstances, and..."
"... happens at once which dramatically reduces timescales. An inefficient or "traditional" solicitor works like this: Receives contract and title deeds which he files He waits to get the mortgage offer through (3-4 weeks). No point doing any work that will cost you money until the bank has..."
"... the local searches are back he then gathers all the papers together at one time. He looks at the contract, title and lease along with the local searches. He now raises enquiries all at once as this is easier and takes less of his time. These will take 2-4 weeks, often depending on the efficiency of the managing agents, the local council and the vendors..."
"... and the vendors solicitor. He receives these enquiries and raises a couple more for clarity (Another 1-2 weeks) He receives these replies and posts you the contract (2-3 days) You sign it and return it with a cheque (1 week to clear) You exchange The traditional approach will easily take..."
"... traditional approach will easily take three to four months from offer to exchange whereas the modern approach can usually keep the timescales to within four weeks! The traditional solicitor will argue that if anything were to go wrong at any stage he has saved you money. If your survey is a problem, for example, at least you will not have paid for local searches or his time to look at the contract. It's a contradiction - the longer a sale drags on, the more likely it is to fall through (see Chapter 19: Time Costs Deals) and cost you money..."
"... to most people solicitors have their own postal system known as DX (Document Exchange) which allows them to move large documents rapidly between each other. Very small solicitors or extremely old fashioned ones have not invested in this and so much backwarding and forwarding is reliant on the post. Considering the number of strikes at individual sorting offices over the last few years the last place you want your signed contract is in a sorting office while postal workers argue over health and safety or pay and..."
"... large conveyancing firms feel it is efficient to break down the process into bits which are dealt with one by one. First they check the title, fixtures and fittings list, sellers questionnaire and contract have all arrived. Only when all documents are in do they then pass it onto the next stage. This is handled by a different team who order the local searches and wait for the..."
"... searches and wait for the results. Once local searches have come back the whole lot gets passed to the next team who then raise enquiries on the title, contract, fixtures and fittings, sellers questionnaire, local searches and maybe even on the survey. When the replies have come back they..."

"... accepted offer simply means you enter the no mans land that exists between 'Sale Agreed' and 'Exchange of contracts'. There is absolutely nothing binding about having an offer accepted so its worth knowing what has to be organised in order to get a more concrete deal. This twilight zone is covered in Part III, From Offer to Exchange but first let's cover how to make offers which get..."

"... such your non-refundable deposit would have to be subject to these and a whole range of other problems. Before you know it your non-refundable deposit is subject to contract and subject to survey and of no security whatsoever to the vendor. Furthermore it will have taken so long to agree the terms of a non-refundable deposit that no work on the actual purchase will get done. This is not a healthy scenario as we will see in Time Costs..."

"... believe should occur. Arching over all of this is the essential concept that the longer it takes to move from Offer Agreed to Exchange of contracts, the more likely it is that the purchase will fail. To understand this specifically see Chapter 19: Time Costs Deals. Once your offer has..."
"... is because of this that there are regular arguments between solicitors so it is often useful to have a second line of communication. This is either via the agent or, in the case of a private sale, directly with the vendor. Nothing that is spoken about in these secondary lines is binding until both solicitors are aware of it and it has been written into the contract but such discussions can be faster and more accurate as questions and answers are passed through fewer parties. It is worth knowing..."
"... date that can be agreed with the vendor Raise the finances to purchase the property Organise for professionals to inspect the property Sign the contract Give your solicitor funds to exchange and complete - Instructing a Solicitor - Once your offer is agreed you will need a solicitor..."
"... Dates - It seems obvious to agree a date for the Exchange of contracts. This is the moment that you agree to definitely buy the property and the vendor agrees to definitely sell it. Up to this point the sale is only agreed subject to contract, and often subject to survey. Subject to..."
"... to contract means you agree to buy the property only if what you have been led to believe is true. In other words you may think that the garden belongs to the flat because the agent told you that but in fact it is shared with the property upstairs. When you discover this in the contract you decide not to purchase the..."
"... enough even though a sale may be agreed subject to contract you can still decide at any point before exchange not to purchase for any reason you wish. It can have nothing to do with the contract or the survey but could simply be because you don't feel like it. As such the wording is slightly..."
"... of contracts is not the date at which you take possession of the property. It is the date which you agree Completion. Completion is the date when the vendor must be out and you can move in, the property legally becomes yours. Completion can take place on the same day as exchange or months..."
"... are two ways to buy a property. You can purchase for cash or by borrowing. Either way you will need to put down a deposit when contracts exchange and pay the balance on completion. The deposit is normally between five and ten percent of the agreed price although it is possible to exchange with anything from zero to one hundred..."
"... is extremely important to know that the surveyor is qualified to spot tell-tale signs but cannot actually or absolutely state that something is wrong. He may say, for example, that "the windows are in need of refurbishment and that a qualified contractor should assess the cost" or "there appear to be signs that the property is subsiding to the rear and a qualified structural engineer should survey the property to assess the extent of any..."
"... a thorny issue. Any good estate agent will hold lists of companies that they have used in the past and can be a good place to find contractors. Any contractor should be given a copy of the relevant part of the survey so they know what it is that they are there to inspect. What Can Go..."
"... needs to be inspected The surveyor believes he knows how much needs to be spent and quotes a figure The contractors that go in are looking for work and so see issues where there are none Neither you nor the vendor can agree who will pay for a specific specialist to check the property. As an..."
"... carried out but they vary dramatically so it continues to remain unclear whether or not there really is an issue to be resolved - Signing the contract - While you are busy making sure the property is as sound as you thought it was, your solicitor is busy making sure the paperwork..."
"... anything the solicitor feels is unusual. This is the time to check that all the things you thought were there (such as a parking space or the right to use a communal roof terrace) really are! With this report will be a contract for you to sign. Putting your signature on this paper is not..."
"... to the vendor's solicitor (see below). To know the date you want completion to occur on Once you give the green light he will call the vendors solicitor and effect the exchange of contracts. What Can Go Wrong The contract gets lost in the post and your solicitor did not keep a..."
"... green light he will call the vendors solicitor and effect the exchange of contracts. What Can Go Wrong The contract gets lost in the post and your solicitor did not keep a copy There are things in the report which show the property is not what you thought it was (e.g. there is no parking..."
"... everything in the legal paperwork and get bogged down checking the work you have paid your solicitor to carry out Your signed contract gets lost in the post causing a delay No one can agree the date for completion You go on holiday and your solicitor does not exchange because he is waiting..."
"... discussed in Specifying Exchange and Completion Dates (see above) your solicitor will usually need a cash deposit to give to the vendors' solicitor when exchanging contracts. The only exception is when you are using a one hundred percent mortgage or the vendor has agreed that you will provide a deposit of zero..."
"... percent. The deposit must be in cleared funds. What Can Go Wrong Your solicitor only asks for the deposit when he has received your signed contract and you have to write a cheque which takes five days to clear The cash is in an account which restricts the amount that can be removed at..."
"... any further enquiries from the vendor's solicitor Apply for searches Check your mortgage offer Issue you with a report Exchange contracts Complete - Checking the Paperwork - Your solicitor will receive a set of papers from the vendor's solicitor. If the vendor is well..."
"... contract - this is a short document and basically says that you agree to buy and the vendor agrees to sell the property. The contract is only signed by the vendor and you once all the other checks have been made. Once you have signed your part and the vendor has signed theirs the documents are exchanged between the solicitors. Hence this moment is known as Exchange of contracts or more often as simply the Exchange. It is the moment of no return when you must buy and they must sell even though, usually, no full payment has been made. The first contract that your solicitor receives is usually known as the Draft contract as it has not yet been..."
"... down the process and adds to the risk of the purchase falling through Your solicitor does not believe the contract is legally adequate and gets into an endless argument with the vendor's solicitor over the wording. There is no definitive protocol for what a seller's pack should look like..."
"... read it carefully. The report usually arrives with all the other paperwork so you can read the actual lease or view the management accounts yourself. Attached to it will be the contract for you to sign. By doing so you are saying that you accept all the attached paperwork. What Can Go..."
"... you. The solicitor is extremely slow in putting the report together The report and all the documentation gets lost in the post - Exchanging the contracts - Your solicitor is only able to do this once he has your part of the contract back and signed by you. He will also need to be in..."
"... solicitor is only able to do this once he has your part of the contract back and signed by you. He will also need to be in cleared funds (see above). With this he is ready so long as the vendor has signed his part and returned it to his solicitor. Despite having all of this he will probably wait for your final verbal instruction before..."
"... cleared into his account. - Completion - When Exchanging contracts all parties agree the completion date. Completion is the day that you pay the balance of any money to the vendors solicitor and legally take possession of the property. In order to complete successfully your solicitor..."
"... is to: Send the standard set of paperwork to your solicitor Reply to any further enquiries your solicitor has Send the approved contract to your solicitor and to the vendor Exchange contracts Complete - Sending the Paperwork - The vendors solicitor has to collate the paperwork..."
"... any further enquiries from the vendor's solicitor Apply for searches Check your mortgage offer Issue you with a report Exchange contracts Complete - Checking the Paperwork - Your solicitor will receive a set of papers from the vendor's solicitor. If the vendor is well..."
"... and so tend to arrive at different times. The contract: Every solicitor usually has their own version of a contract on file. They will fill in certain details and send it off as a Draft contract as they expect your solicitor will want some changes. The Title Deeds: These will either come from..."
"... vendor's solicitor always starts the transaction as the most relaxed party. He hopes that he will send off the paperwork that he believes your solicitor requires and wait for a call to exchange contracts. Ask a vendor's solicitor if he is ready to exchange and, so long as he has sent out the original set of paperwork, the answer is always,..."
"... not to reply The Vendor's solicitor winds the vendor up by stating how ready he is to exchange every time the vendor calls - Sending the Approved contracts - Once the arguing has subsided and both sides have agreed that all enquiries have been cleared up the vendor's solicitor will..."
"... vendor calls - Sending the Approved contracts - Once the arguing has subsided and both sides have agreed that all enquiries have been cleared up the vendor's solicitor will produce the final contract and send it to your solicitor What Can Go Wrong For once this is a procedure that..."
"... your solicitor has your signed contract and funds for the deposit, and the vendor's solicitor has the vendor's signed contract, exchange of contracts can take place. The money is sent electronically between the solicitors and they verbally agree that exchange has taken place at a specified time (say..."
"... date that can be agreed with the vendor Raise the finances to purchase the property Organise for professionals to inspect the property Sign the contract Give your solicitor funds to exchange and complete - Instructing a Solicitor - Once your offer is agreed you will need a solicitor..."
"... carried out but they vary dramatically so it continues to remain unclear whether or not there really is an issue to be resolved - Signing the contract - While you are busy making sure the property is as sound as you thought it was, your solicitor is busy making sure the paperwork..."
"... the contract - The vendor has agreed to sell to you at a certain price so as soon as the wording of the contract itself is agreed between the two solicitors he can sign the document and simply wait for you to sign yours when all the other paperwork is out of the way. But many don't and..."
"... assumes everything is in hand and goes on holiday making exchange impossible The vendor's solicitor only sends the vendor the contract once you have signed your copy. It spends time and is delayed in the post - Summary - Despite the endless pitfalls that seem to be placed between..."

"... two hours of Melissa attempting to renegotiate the price the vendor had decided that this meant there was no need for him to remain true to his word, if his buyer was not true to hers. He asked his solicitor to retrieve the contract and called the people in the flat upstairs to give them the good..."

Chapter 19: Time Costs Deals
"... take stock and change the bigger plans we have, such as moving house. The longer the time period between offer and exchange of contracts, the more likely it is that the deal will fall through, often for no good reason. Here are just a few events that can stop either the buyer or the vendor..."
"... you let your purchase drag on for 6 months that's a 28% chance you will loose your solicitors fee, survey fee, hours of time and quite possibly a few thousand pounds more if the market rises. All this before you have even looked at a survey or contract with all the potential those documents have to ruin the..."

"...Sarah and Nicki doubted the difference in the two figures and instructed a second damp proof company who quoted £379 plus VAT. The vendor felt that the buyers were obviously desperate to reduce the price and if it wasn't this they would find something else in the legal paperwork so, having lost confidence in them, withdrew the contract. ..."
"... market was moving up. The vendor eventually became frustrated and withdrew the contract from Diane's solicitor. Five weeks later he sold the property at the asking price and the survey from the new buyer made no mention of the tree or any movement in the property. Diane ended up buying a..."

"... the Paperwork - There is a set of basic paperwork which your solicitor is going to need from the vendor's solicitor if exchange of contracts is going to take place. If this has not been prepared prior to your offer there will be immediate delays unless: you have chosen a good..."
"... Land Registry Nothing Wednesday Waiting for Office Copy Entries Nothing Thursday Office Copy Entries arrive and a draft contract is drawn up Nothing Friday contract and Office Copy Entry is sent to your solicitor Nothing In..."
"... Copy Entries arrive and a draft contract is drawn up Nothing Friday contract and Office Copy Entry is sent to your solicitor Nothing In other words it has been two weeks since the deal was agreed and your solicitor has so far done..."

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