When buying or selling a property, there is a legal process to follow and two parts of this process are exchange and completion.
Exchange is when the contracts are exchanged in the sale or purchase. This is when the transaction becomes legally binding on all parties involved and it’s also when a completion date is set.
Completion is the actual date when the sale or purchase is concluded and is the date you would move into (or out of) your home.
Let’s look more closely at both exchange and completion as part of the conveyancing process.
Exchange of contracts will only take place once all legal matters connected to the transaction have been dealt with. This includes:
- Agreeing a price for the property. This includes any fixtures or fittings included in the sale or purchase.
- Completing all necessary surveys on the property if you are buying a property.
- Having a formal offer for a mortgage.
- Making sure your solicitor has completed all the relevant searches. If you want to read more about the kinds of property searches you need, read our article on property searches.
- Arranging building insurance for the property. You become liable for the property as soon as contracts are exchanged.
- Making sure that all paperwork has been completed, signed and is correct.
If you are buying a property, you’ll pay the deposit at this stage, which is usually 10% of the purchase price. Once the deposit has taken place and the exchange of contracts has happened, you are legally bound to the transaction and so is the seller. Neither party can withdraw from the transaction without financial penalties. It’s really important to be clear about this point, as before exchange of contracts, either party can walk away from the transaction at any time, without penalty.
There is usually a minimum of a week between exchange of contracts and completion. This allows time to arrange for the funds from mortgage lenders. But this time period can be shortened if all parties agree and there is no mortgage lender involved. There can also be a longer period of time between exchange and completion if all parties agree to this.
Completion is a really exciting day for most people, but it can also be extremely stressful too. On completion day, funds are transferred from the buyer to the seller’s solicitor. Once the money has been received for the property, the keys are released with the estate agents.
The time of completion can depend upon how many people are involved in the chain and how long the banks take to transfer the funds. Most completions happen between midday and 2pm. This allows everyone time to leave or move in, depending on whether you are selling, buying or doing both!
Buying or selling a property can be really stressful, particularly if you are struggling to get hold of your conveyancer. We pride ourselves on giving all our clients the best service possible during their transaction. You’ll be given the name of your conveyancer, their email address and telephone number so you can always get hold of them for any information or updates you need.
To find out more about the service we offer, call us now on 0117 926 4121 or make a free online enquiry now.