What Does SSTC Mean? ￼
Sold Subject To Contract, otherwise known as SSTC, is one of the many tags and terms you will find in the description of a property listed for sale.
Home Emergency Insurance for £130
- ✓ Covered up to £1,000 per emergency
- ✓ £250 for overnight accomodation
- ✓ Call out, labour & parts included
Once a property is labelled as SSTC, the buyer’s solicitor will gather all required documentation and paperwork to complete the sale contract. For the seller having the SSTC notice under their property indicates to all other prospective buyers that the property has been removed from the market.
The term ‘under offer’ is also commonly used under properties listed for sale and is synonymous with SSTC. It means that the seller has accepted an offer for the property and that the sale is being processed.
Why is SSTC important?
Although the SSTC label is not legally binding, the vast majority properties are sold to the interested buyer.
The SSTC tag provides other potential buyers with the notice that the property is on the verge of sale, and it offers the primary purchaser a form of security as the landlord commits to the sale of the property. All of this, of course, is subject to the acquisition of the correct paperwork.
Is SSTC legally binding?
In short, no, the SSTC is not a legally binding clause for the sale or purchase of a property, as difficulties or changes may arise when finalising the paperwork.
A party is only legally bound to the purchase or sale once the contract has been signed. Even though SSTC means that the seller has accepted a valid offer or bid for the home, the landlord can reserve the right to entirely remove the property from the market.
Also note that depending on the circumstances, any additional and competing offer placed on the property must be relayed to the landlord by the agency, who can then decide whether to consider or ignore the offer. Around 15% of all properties listed as SSTC will be relisted on the property market.
What is gazumping?
Situations in which the property is tagged as SSTC, but the landlord receives a higher bid and accepts it is called gazumping. These last-minute bidders are oftentimes very keen and determined to acquire the property.
A competitor undercuts the initial offer of the standing SSTC with a higher bid that the landlord is likely to accept. It is not illegal, though one can question its morality and fairness.
How to avoid gazumping
There is no clear route to avoiding gazumping, however, some prospective buyers ask the landlord to remove the property from the market entirely.
This presents a small yet costly risk to the landlord if the sale falls through as, by this point, the buyer will still have no contractual or legal obligations to acquire the property. If the prospective buyer were to back out of the sale, the landlord would then remain empty-handed.
Having the property under the SSTC labeled is arguably the most plausible and best solution for both buyer and seller. It provides a scope of security to both parties without limiting or binding them contractually.
Once everything is signed, both parties have entered a legally enforceable contract that should result in the sale of the property. If that fails to happen, the innocent party that has lost out on either acquiring a property (buyer) or receiving the property’s money’s worth (seller) can sue for damages.
All in all, if you are determined to acquire or sell a property it is crucial to make your position understood. The more eager you appear to want to uphold the contract, the less likely the other party will feel that you are on the fence over buying or selling the property. This will in turn increase the likelihood of a successful purchase.