What 'subject to contract' means on a purchase

Sold subject to contract means the seller has accepted an offer from a buyer, but the agreement is not yet legally binding¹. An offer is not legally binding until contracts are exchanged, so either side can still walk away in the weeks that follow². You will see the same position described as "under offer", which means a seller has accepted an offer but contracts are yet to be exchanged¹.

The phrase matters because of what it does not do. It does not commit you to buy, and it does not commit the seller to sell to you. Until contracts are exchanged, the buyer is under no legal obligation to buy the home and does not have to pay for any of the costs the seller may have incurred³. The seller, meanwhile, is responsible for drawing up a legal contract to transfer ownership once they accept your offer, but that contract only bites at exchange².

Exchange of contracts is the point where the sale is legally binding⁴. From then on, both parties are legally bound to complete the deal and can no longer change their minds without financial repercussions¹. Completion, when the property legally transfers and you can move in, usually follows about four weeks later⁵.

Subject to contract: an agreed offer is not yet binding

When an estate agent marks a property as sold subject to contract, or SSTC, it is telling other buyers that an offer has been accepted but the sale has not been secured. The jargon guide from the Home Owners Alliance defines it plainly: the seller of a property has accepted an offer from a buyer but the agreement isn't yet legally binding¹. The same guide notes that at the point the offer is made, it is not legally binding¹.

That has a practical consequence people often miss. Because nothing is binding, a seller can keep talking to other buyers, and a buyer can keep looking. Even a sealed bids process, where buyers submit their best offer by a deadline, is not legally binding: either party could still back out at any point before contracts are exchanged³.

The seller's obligations at this stage are procedural rather than contractual. Once they accept your offer, they are responsible for drawing up a legal contract to transfer ownership². Their solicitor or conveyancer prepares a draft contract, which starts as an initial contract and is then edited to include the necessary information as required¹. Your side reviews it, raises questions and carries out searches. None of that creates a binding deal on its own.

It helps to know the vocabulary you will meet in letters and emails during this window. The seller is often called the vendor, another name for the seller¹. Conveyancing refers to the legal process involved in property transactions¹. The contract itself is a legal agreement setting out contractual terms between the buyer and seller, drafted by a solicitor or conveyancer¹.

What happens between offer and exchange

The period between an accepted offer and exchange is where most of the work happens, and it is the period in which the sale can still collapse. Your conveyancer investigates the property and the seller's title, raises enquiries, and reports to you and to your mortgage lender.

Searches sit in this window. Your conveyancer orders local authority and other property searches, and the results feed into the draft contract, which is edited to include the necessary information as required¹. Searches are one reason the process takes weeks rather than days, and they are also one of the costs you carry if the purchase falls through.

The buyer's side is not the only one working. The seller's conveyancer answers enquiries and negotiates the contract terms. If you are buying with a mortgage, your lender will also want a valuation, and its offer of a mortgage is typically issued subject to satisfactory valuation and legal work.

Two behaviours are worth knowing about because they happen in this window. Gazumping is when a seller accepts a higher offer from someone else after having accepted yours. Gazundering is the mirror image: you can lower your offer shortly before exchanging contracts, which is known as gazundering³. Neither is unlawful while the sale is subject to contract, because neither side is bound.

Exchange of contracts: when you become legally bound

Exchange of contracts is the moment the deal becomes binding. The exchange happens when the buyer's and seller's legal representatives swap signed contracts, and the buyer pays the deposit⁶. It is also the moment when your buyer pays a deposit and things become legally binding, as Which? puts it in its guide to selling⁷.

The legal effect is the same however it is described. Once the seller and buyer exchange contracts, the deal becomes legally binding⁸. You are legally bound to buy the property once you have exchanged contracts⁹. Once you exchange contracts, you are legally obliged to purchase the property¹⁰. In Northern Ireland the position is the same: the exchange of the contracts to buy the property is the point where the sale is legally binding⁴.

From that point, the consequences of changing your mind are financial. If you pull out of the sale at this point, you may lose the deposit you put down and could be sued by the seller³. The seller's position is set out by Citizens Advice: if the buyer pulls out of the sale after contracts were exchanged, you can sue them for any loss this causes you and you may be able to keep the deposit¹¹.

From exchange to completion

Completion is the legal transfer of a property so that you own it and are able to move in¹². It usually takes place about four weeks after exchange of contracts, although it can be earlier⁵. One lender's timeline puts the exchange to completion stage at 1 to 4 weeks¹³.

The gap exists because money has to move. Your mortgage lender releases funds, your conveyancer receives the purchase money from you and the lender, pays the seller's side, and the ownership is transferred. You get the keys on completion day.

Some schemes impose a deadline on completion. Under Help to Buy - Wales, you must complete buying your home within 6 months of exchanging contracts¹⁴. That is a scheme rule rather than a general one, but it shows why the gap between exchange and completion is usually kept short and agreed in advance.

If you are buying in a chain, your completion date is tied to everyone else's. That is one reason dates slip, and one reason a buyer or seller may want a longer or shorter gap. The date is agreed at exchange, and once agreed it is binding along with the rest of the contract.

Conveyancing costs while a sale is subject to contract

The costs you run up before exchange are the reason a collapsed sale hurts even though nothing was binding. Conveyancing is usually carried out by a solicitor or licensed conveyancer¹⁵, and you pay for their work whether or not the purchase completes.

One buying cost breakdown puts conveyancing at £1,050 as an estimate¹⁶. That figure sits alongside searches, a survey if you commission one, and any mortgage arrangement or valuation fees. These are the amounts at risk if the sale falls through before exchange.

The position on the deposit itself is more reassuring. If the sale falls through before you exchange contracts, you usually have not paid the deposit yet, so your money is safe in your bank¹⁷. If you pull out after contracts are exchanged, which is very rare, you could lose your deposit¹⁷.

So the practical picture is: your deposit is generally not at risk before exchange, but your professional fees are. That is why buyers are often advised to hold off on expensive optional work until the legal position is clearer, and why a survey is usually commissioned early enough to inform a decision but before exchange.

Scotland works differently: missives instead of exchange

In Scotland there is no exchange of contracts. Instead, your solicitor negotiates any conditions of the purchase by exchanging letters with the seller's solicitor, sometimes called missives, and the sale is finalised by signing a contract called the concluding missive¹⁹. The concluding missive is the Scottish equivalent of exchanging contracts¹⁷.

The legal effect arrives at a different point. The final missive is a binding contract, which means neither you nor the seller can back out without having to pay compensation²⁰. That is a firmer position than England and Wales, where either side can withdraw until exchange.

The terminology differs in other ways too. In Scotland, the process is called an exchange of missives rather than an exchange of contracts²¹. The same source sets out the split across the UK: in England, Wales and Northern Ireland, exchange is when everybody is legally bound to the transaction, while in Scotland the process is called missives, an exchange of letters between the legal representatives once the terms of sale have been agreed²².

For a buyer, the practical difference is timing. In Scotland you are committed earlier, once missives are concluded, so the window in which you can change your mind without cost is shorter. If you are buying north of the border, see buying a home in Scotland and when is an offer on a Scottish home legally binding.

Where to get help

If a purchase goes wrong, or a seller or buyer behaves in a way you think is unfair, there are routes to take. Your conveyancer is the first point of contact for anything about the legal process. If you have a complaint about a solicitor or licensed conveyancer, their professional body handles it. For problems with an estate agent, there is a complaints route.

Free, impartial guidance on buying and selling is available from Citizens Advice and from MoneyHelper. If a purchase has left you in financial difficulty, debt advice charities offer free help.

For the wider process, start with how to buy a house in England: step by step, conveyancing: the legal work when you buy a home and exchange of contracts and completion. If you are still at the offer stage, making an offer on a house covers what happens before subject to contract.