What Is Meant by Sold Subject to Contract

If you`re in the market for buying or selling property, you may have come across the term “sold subject to contract.” But what exactly does it mean?

In short, “sold subject to contract” means that an agreement has been reached between the buyer and seller, but the sale is not yet legally binding until all the necessary paperwork and legal requirements have been completed.

When a property is listed as “sold subject to contract,” it means that the seller has accepted an offer from a buyer, but the sale is not yet finalized. Both parties have agreed to the terms of the sale, but there are still several steps that need to be taken before the sale becomes legally binding.

Some of the steps that need to be taken include:

1. Exchange of contracts: This is the point where the seller and buyer sign a contract of sale. The buyer typically pays a deposit at this point, which is usually 10% of the purchase price.

2. Completion: This is the point where the sale becomes legally binding, and the buyer takes possession of the property. The remaining balance of the purchase price is paid, and any outstanding paperwork and legal requirements are completed.

Until these steps are taken, the sale is not considered final, and the property is still listed as “sold subject to contract.”

It`s worth noting that “sold subject to contract” does not mean that the property is still on the market. Once an offer has been accepted, the property is typically taken off the market, and other potential buyers are no longer able to view or make offers on the property.

In summary, “sold subject to contract” means that a buyer and seller have agreed on the terms of a sale, but the sale is not yet legally binding. There are still several steps that need to be taken before the sale becomes final, including the exchange of contracts and completion.