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23rd July 2019

What is the Difference Between Under Offer and Sold STC


Under offer Sold subject to Contract


What do Under Offer and Sold STC mean?

The terms Under Offer and Sold STC have very similar definitions. They can be used in exchange for one another and are done so by many buyers, sellers and agents. Whilst the differences are mild, there are a few.

Under offer

Under Offer is a term used by estate agents which means a seller has accepted an offer. In some cases, the offer will normally be below the asking price.

Sold Subject to Contract (STC)

Sold STC can mostly mean the same thing. An offer has been accepted by the seller, but the paperwork has not yet been completed.

Under offer refers to a marketing and advertising term commonly applied by estate agents. It simply implies that an offer made earlier has been accepted. So what is the primary variance between sold and under offer when talking about contracts?

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What is the difference between Under Offer and Sold Subject To Contract?

There is a need to begin by understanding that Sold subject to Contract or SSTC meaning simply refers to one thing. Under Offer in this regard means that an interested buyer finds a certain property interesting, and is, therefore, willing to put in a bid for it. Often, the offer made by the buyer will be below the price set by the seller. It is what is implied by the term ‘under offer.’

It means that the person looking to sell that property is yet to make a decision on whether they will accept the offer from the interested buyer or not. In the event that the seller becomes intrigued with that offer and chooses to accept it, then the estate agent refers to the property as Sold STC or Sold subject to contract.

In the last few years, it has become common to see the alternative phrase ‘sold subject to contract’, sometimes abbreviated to ‘sold STC’. All this means, in practice, is that an offer has been accepted on the property but contracts have not yet been exchanged, so in affect it can still be purchased.

Note that the acceptance does not mean that the paperwork has been processed. At this stage or at this moment in time, the only thing that the buyer has done is to accept an offer. Other interested buyers are, as such, welcome to continue making inquiries about the property. A sale will only be considered complete when all parties involved come together and sign the contracts. The contracts will then need to be exchanged.

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Can you purchase a property that is Under Offer or Sold Subject to Contract?

If you are interested in a property that is listed as under offer or Sold Subject to Contract, then you can still purchase this property with a higher offer. It will then be up to the buyer to decide if they wish to go with the higher offer or stick with the current buyer. (See can you put offer on STC property).

You may find some estate agents reluctant to take offers from you, but if your offer is significantly above the current offer, they are obliged to pass this offer on to the property seller.

The seller needs to weigh up the decision which will not only be about price. If they have accepted an offer and the sale is well underway, even if they get a slightly higher offer, they may well wish to stay with the current purchaser. If however the new offer is substantially above the current offer or the new purchaser can move more quickly than the current purchaser they may accept the new offer.

The property is only sold when the contracts have been exchanged. Up until this point, the seller is free to take new offers.


Market Statistics

According to current property statistics, close to 15 per cent of all properties sold subject to contract will at some point come back to the market. The reason why this happens is that the seller and the buyer are unable to agree on the sale terms. Failure to agree means that a property will eventually get listed once again.

From the explanation given above, it is clear for all to see that the existing difference between under-offer and Sold STC is pretty self-explanatory. As such, an interested buyer should not be afraid to make inquiries about a property Sold STC. While a property may already have been indicated sold subject to contract, it may come a time when:

  1. The person who bought the property is not impressed with the information that pops up in local searches.
  2. A mortgage application fails to go through forcing the buyer to cancel the deal

III. A survey conducted by the buyer or their representatives return back data and information that complicates a mortgage application


The Scotland Case

One thing to note is that the system used in Scotland is quite different. Any purchase offer made by a prospective buyer immediately becomes legally binding as soon as it is made. In short, Scotland does not have the Subject to Contract stage.

From time to time, the paperwork process in Scotland or missives as they are known may fail to work for a certain transaction. In such an eventuality, there is what is referred to as Sold STCM or Sold Subject to Conclusion of Missives. Estate agents must pass on all the offers they receive on a given property.

Here, all offers made on a given property are in many cases the result of a survey process, satisfactory contract, and mortgage approvals. Therefore, the estate agents are legally required to ensure that they pass on all the information and offers they receive from potential buyers. This is regardless of what they may think about the offer that has been made.

The only time this is not applicable is when the estate agent has in their possession a signed letter from the person selling the property. The letter should state that no information or offers below a certain figure should be passed on to them by the estate agents. The signed letter from the seller will mean that an estate agent has been released from passing on all offers.

Estate agents in Scotland are also expected to ensure that the property owners have been informed about all existing offers. This will include making a written confirmation to the seller. The written confirmation has to occur as soon as possible, without any dilly-dallying from the estate agent. Simply put, an agent is legally required to send the written confirmation within the same business day.


Final Thoughts

You should now have a better understanding of what Under Offer and Subject to Contract terms mean. They are terms that anyone looking to purchase property will encounter before the close of a transaction.

Another essential thing to note is that Subject to Contract and Subject to Conclusion of Missives are two similar terms. But despite their similarity, they are different in their application due to the presence of legal requirements. Requirements that dictate what an estate agent can and cannot do when representing a seller.

Essentially the missives are letters exchanged between buyers and sellers via their solicitors.

When buying a property, it is not always as straightforward as exchanging letters to conclude the missives. Usually, buyers will make a conditional offer, this means the sellers can only accept the offer once conditions are met. An example of this can be the outcome of the results of a survey. The buyer may have certain reservations that need to be addressed before the sale can be completed.

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Updated 14/12/2022