Property: Under Offer/Sold Subject To Contract – what’s the difference?
|Author: Craig Bees||Published: 28th July 2020 10:57|
On the move: helping you understand estate agent terms
A common question from house-hunters to estate agents is: what is the difference between ‘under offer’ and ‘sold subject to contract’?
They have seen both terms applied to properties and assume, reasonably enough, that they must mean different things. In fact, and confusingly, they in fact mean pretty much the same thing.
It all depends which estate agent is handling the sale and which form of words they prefer.
Theoretically, a property could be described as ‘under offer’ if an offer had been made on it but rejected by the seller. But most agents would probably not use the term ‘under offer’ in those circumstances. Apart from anything else, the seller would object that it might put off prospective buyers.
So the phrase ‘under offer’ only generally becomes applicable when an offer has been accepted, whether or not at the full asking price, by the owner.
Thereafter, the property is deemed to be under offer and legally can be described as such, whether on the estate agent’s board or website.
In recent years, it has become common to see the alternative phrase ‘sold subject to contract’, sometimes abbreviated to ‘sold STC’ or ‘SSTC’. All this means, in practice, is that an offer has been accepted on the property but contracts have not yet been exchanged.
There is a time lag often lasting for several months while surveys are done, mortgages are approved and so forth.
So, can you make an offer on a house that is under offer? Many buyers insist that once their offer on a property has been accepted, the words ‘sold subject to contract’ should be used to describe the property.
It is their way of saying ‘Hands off!’ Many estate agents will usually stop showing the property to other prospective buyers but the situation is far from settled.
The well known practice of gazumping – where a new buyer comes in with a better offer on a property that is already under offer – is not as prevalent as it once was. But it still happens quite regularly.
So if you are interested in a particular property and see that it is ‘under offer’ or ‘sold subject to contract’, you should not assume that it has been permanently taken off the market. That point will only be reached when contracts have been exchanged.
As a buyer, you can reduce the risk of gazumping by asking the seller to take the property off the market once they have accepted your offer, building a good relationship with them and, of course, working to get to exchange of contracts as soon as possible.
It may also be worth checking whether your seller’s agent has a policy on gazumping, meaning they require the seller to turn down any offers after the initial acceptance.
The dos and don’ts around gazumping are notoriously murky. A question that often gets asked is, ‘can one make an offer on a property that is under offer or sold subject to contract?’
The simple answer is yes, even if the property is already under offer, the agent is legally obliged to pass on your offer to the owner. After that, the ball is in the seller’s court.
One would like to think that most people will behave honourably. Quite often the sort of people who put in offers on properties that are already under offer can be aggressive in their approach.
But if vendors feel nervous that the offer that has already been accepted is under threat for some reason – perhaps because of an unsatisfactory survey – it is only natural for them to be open, at least in theory, to other offers. That is obviously particularly true if new offers are above the original asking price.
Hope that clears up the matter. If you have any queries call us on (01327) 359164.
Property Q&A: Thank you for all your questions and please keep them coming. Here is the latest one.
Q: There are so many villages around Towcester, it’s hard to decide where’s best for me and my family to choose where to live - what do you advise?
A: Thanks for your question. Yes, this can be a tricky one. Friends, family, work colleagues and neighbours can all help you with this but if you need more advice take a look at our comprehensive village website guide. Go to https://www.bartramandco.co.uk/towcester where you will find lots of information on all the local villages. If you need more information call us on (01327) 359164 and we will be happy to assist.
You can mail your property questions to firstname.lastname@example.org. I look forward to hearing from you.
Badby&Farthingstone CC news: with recreational cricket now underway, midweek and weekend matches are coming thick and fast.
After two inter-club matches, the club’s return to more competitive action saw the team record their third successive victory at Spencer Bruerne following their successes there in 2018 and 2019.
On a beautiful, sunny afternoon the home side were reduced to 113 in their allotted 30 overs thanks to some excellent bowling and fielding from the visitors, including a fine debut from Ollie Webb.
A solid opening partnership by Andy Nightingale and Chris Pratska gave B&F grounds for optimism, realised by the later batsmen who saw the team home by five wickets with over five overs to spare. A happy hunting ground indeed. Special mention to the Dicks family (Will, George and Alfie) who of whom contributed handsomely.
Last Sunday saw a close last-over home defeat to Abington. The visitors batted first and were reduced to 90-9 by excellent bowling and fielding with Jude Dyke (3-26) the pick until a last-wicket stand of 30 saw a total of 127 from 35 overs.
The visitors also bowled well, making early inroads into the home batting until a late onslaught put B&FCC within reach of the required target. With 16 needed off the last over, it was all or nothing with the visitors prevailing by 12 runs. Man of the match Ryan Haynes: 24 runs, 2 wickets, 2 catches.
This weekend sees the club entertain Braunston Paddox CC in what should be a lively, keenly-contested affair.
Help to Buy Scheme: available on all Moat Lane development properties in Towcester with part exchange also considered. Contact us on (01327) 359164.
Monthly draw: why not make August your month you win a case of Italian wines (red/whites/mixed) or one month’s membership at Whittlebury Hall Leisure Club.
How To Enter: every valuation and instruction for sale or rental between now and Wednesday August 26 will be entered, the winners being notified by e-mail.
If you’re thinking of selling or letting your property and want to win one of these great prizes on offer call (01327) 359164 and speak to our sales or lettings team.
Until next time.
Craig Bees, MD Bartram & Co
E-mail me at email@example.com
Tel: (01327) 359164
Fax: (01327) 359166