What is Sold Subject to Contract when you buy a house in Southampton?
Here in England, Sold Subject to Contract is a term used to describe a buyer agreeing to buy a house and a seller agreeing to sell, the legal work is in progress but not complete.
Subject to Contract means intention to buy and sell but not legally bound to do so unless everything is agreed and everyone is happy and contracts are signed and exchanged.
What do the solicitors do first?
I send the Memorandum of Sale to the sellers solicitor and to the buyers solicitor and they both get to work.
The sellers solicitor sends the seller a big form to complete called the Fixtures and Fittings list. This is all the information about guarantees, planning permissions, boiler servicing contracts and things like that. It also includes what you will leave in the property for the buyer to benefit from.
They also send the buyers solicitor a draft contract showing the purchase price and legal terms about the transfer of the property to a new owner.
The buyers solicitor contacts the local council to ask for information held about the property. This includes planning permissions, risks in the local area and any work planned in the local area. This is called doing Searches. Councils are slow to respond to these queries and can take 3-4 weeks to respond.
The buyers solicitor also looks through the draft contract sent by the sellers solicitor. They talk to the mortgage company about any lending and receive notices on the valuation and survey. When all they have all the information they need, they report to the buyer telling them everything they have found and if all is well, they agree to exchange contracts.
Can you see how contracts are important at this stage whereas when you were just looking, nothing was about contracts?