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New guidance regarding a property’s market status

6 months ago
New guidance regarding a property’s market status

In August 2023, the National Trading Standards Estate & Letting Agency (NTSELA) team updated its guidance to consumers and property professionals regarding how a property’s status is described during the marketing process.

 

The team decided that terms, including ‘new on the market’, ‘new instruction’, ‘under offer’, ‘sale/let agreed’, ‘sold/let subject to contract’ and ‘sold/let’ – and how frequently these descriptions were updated – could cause confusion among home movers and has, therefore, issued clarification for all those involved.

 

The status of a property that is being advertised, whether that’s online, in print or via a method such as a promotional board, is part of what NTSELA considers ‘material information’. It is a legal requirement for material information to be displayed clearly and updated in a timely manner.

 

In practical terms, this means an agent should change the wording on a listing or promotional board according to where the property is in terms of offer made, offer accepted, exchange and completion.

 

To ensure all home movers are clear as to what the different descriptions mean, the NTSELA has defined the marketing terms buyers may see when they are looking for a property, and these are:-

 

Under offer: A property where an offer has been received, which is under consideration by the vendor but the property is normally still on the market, i.e., further offers may be made dependent upon the vendor’s written instructions. This description should only be used until the offer is accepted or declined.

 

Sale agreed: A property where an offer has been accepted by the seller but, for example, contracts may not have been prepared or the buyer may not be in a final position to proceed. The property may or may not still be on the market, i.e., further offers may be made dependent upon the seller’s written instructions. The seller’s decision on future marketing is material information in this context and should be clearly stated on property listings to avoid any confusion amongst potential buyers. This description may be used until the property is sold or the sale falls through.

 

Sold Subject to Contract (SSTC): A property where an offer has been accepted by the seller, subject to contracts being exchanged. The seller should be asked by the agent to confirm whether the property should continue to be marketed for sale and this decision should be clearly stated on property listings, as above. This description may be used until the sales process is complete or the sale falls through.

 

Sold subject to conclusion of missives (in Scotland): A property where an offer has been accepted but the sale has not yet concluded, pending the exchange and agreement of the missives. The property should no longer be actively marketed for sale. In rare cases, the sale may still fall through, hence the use of this description.

 

Sold: A property where the sale has concluded, resulting in the buyer becoming the legal owner of the property. ‘Sold’ property listings should be removed in line with property portal requirements, relevant codes of practice and local planning laws.

 

In relation to lettings

The guidance from NTSELA also clarifies the situation for those looking for a rental property:

 

Under offer: A property where an offer has been received, which is under consideration by the landlord, but the property is normally still on the market, i.e., further offers may be made dependent upon the landlord’s written instructions. This description should only be used until the offer is accepted or declined.

 

Let agreed: A property where a landlord has, in principle, agreed to enter into a rental agreement with a prospective renter, subject to further checks and referencing. The use of this term is not subject to a relevant person having received a holding deposit from the prospective renter.

 

Let: A property where a landlord and renter have entered into a binding rental agreement.

 

Marketing terms

There is also further guidance on how properties are described during the marketing phase, as below:-

 

New on the market: A property that has not been advertised since the last sale or let of that property. This description should only be used for short period of time.

 

New instruction: A property where an agent has recently been instructed to market (and which may have been offered for sale by another agent without being sold or let); the description should only be used for a short period of time.

 

New and exclusive: A property that is either a new instruction or new on the market which is exclusive to that agent or portal (depending on the context). The description ‘new’ should only be used for a short period of time, although the term ‘exclusive’ can be used for as long as it is applicable.

 

New method of sale/let: A property that is now being advertised for sale or let using an alternative mechanism to the original advert (e.g., changing to an auction or sealed bid for a property sale). This description should only be used for a short period of time.

 

Reduced: A property that has been recently reduced in price. Any reduction should be a genuine reduction against the previous price.

 

How short is short?

While a ‘short’ period of time is subjective to market conditions, the property in question and where it has been advertised, the NTSELA says ‘use of the above terms for a period not exceeding one calendar month is unlikely, in the general course of events, to be considered misleading’.

 

When is the cut off for offers?

In theory, buyers in England and Wales can continue to make offers on a property that is openly advertised, even if it is marked as ‘sold subject to contracts’ (or ‘sold subject to conclusion of missives’ in Scotland). While this can displease potential buyers who have already had an offer accepted, additional offers received during the conveyancing stage can ensure there is back-up interest should a sale fall through. These intentions should be clearly communicated.

 

It is, however, up to the seller to ultimately decide how long their property is marketed for, when to cease all promotional activity and whether to upset purchasers by continuing to market a property after an offer has been agreed.

 

If you are in the market for buying and would like more information about the status of a property, please get in touch. We are also available to advise vendors with regards to the marketing of their home and when to potentially close the sale to new offers.

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