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When buying a house, it is important to understand the various legal terms and phrases that are commonly used in the process. One such term is “subject to contract”, which can have significant implications for both the buyer and the seller.

In general, “subject to contract” means that an agreement or offer has been made, but is not binding until a formal contract has been signed by both parties. This means that either party is still able to back out of the deal until the contract is signed.

When it comes to buying a house, the “subject to contract” clause is typically included in the initial offer that the buyer makes to the seller. This offer will typically set out the terms of the purchase, including the price, any additional requirements (such as repairs that need to be made), and the timeline for completing the sale.

If the seller accepts the offer, they will typically issue a Counter Offer, if it comes with different aspect as of the initial offer. This is where the “subject to contract” clause would come into play. The seller may accept the overall terms of the offer, but will want to ensure that they have the opportunity to fully review and agree to the final contract before it becomes binding.

One issue that can arise with the “subject to contract” clause is the potential for gazumping. This occurs when a seller accepts an offer from a buyer, but then receives a better offer from another prospective buyer before the contract is signed. In this situation, the seller may choose to accept the second offer instead, leaving the original buyer out in the cold.

To protect against gazumping, it is important to work with experienced real estate agents and to have a solicitor review any documents before they are signed. This can help to ensure that everything is done legally and fairly throughout the buying process.

Overall, understanding the meaning of “subject to contract” is crucial when buying a house. This clause can help to protect both buyers and sellers, but it is important to be aware of its potential implications. By working with experienced professionals and being diligent throughout the process, it is possible to successfully purchase a house and close the deal on the right terms.