What are the final things to arrange? Read our guide to exchange and completion.
When you get to the exchange of contracts, the finish line is almost in sight. But what exactly happens at this tantalising stage, and how long do you need to wait around for? Here’s what you need to know.
The exchange of contracts is when the property transaction becomes legally binding. It’s very rare that either party would pull out after this date, unless they’re happy to pay severe penalties or face legal action. The contracts include the agreed date of completion, so it’s a significant milestone.
The word ‘exchange’ is slightly misleading, as it derives from the historical practice where property lawyers would meet in person to exchange contracts. These days, it’s more likely to happen over the telephone.
If you’ve reached the stage where you’re almost ready to exchange, you’ll need to read (and make sure you understand) the contract, then sign it when you’re ready.
The buyer and seller sign identical contracts, which the solicitors of either party read to each other over the phone to ensure they are an exact match.
The solicitors will check that they hold all the relevant legal documents, and verify that any other buyers and sellers in the chain are ready to proceed.
Finally, the solicitors will exchange contracts over the phone, at which point your sale is legally binding. You can pretty much put the champagne on ice!
If all goes to plan, you can expect it to take around 9 weeks from the draft contract stage to your exchange date. But that’s a big if, because there are lots of potential hiccups that can affect buyers and sellers along the way, such as, but not limited to:
Since a property sale isn’t legit until the moment of exchange, you’re playing a wire buzzer game until then: one wrong move trips the circuit and you go right back to the start.
Typically, it takes around two weeks on average between exchange and completion, but the exact length varies depending on your readiness to move.
There is so much to organise before the exchange date — from getting removal quotes to forwarding your mail — that you’ll probably want to give yourself a breather!
Technically, you can exchange and complete on the same day, but in reality, few people choose to do this.
You don’t really want to risk any problems with the transfer of funds and bear in mind that it will take time to hire a removals company and empty your existing property.
Some lenders will insist upon a minimum period before completion, which is usually up to seven working days so they can arrange the mortgage advance with the solicitors. They may charge an additional fee if you want to complete more quickly.
In short, no. Even if the other party requests otherwise, you must include a completion date in your contract before you exchange.
This allows everyone in the chain to make suitable arrangements, such as hiring removal companies, getting essential services set up, redirecting mail and booking annual leave with work. All of which explains why doing the exchange and completion on the same day is unusual.
Check out our moving house checklist for a comprehensive list of things to remember.
When it comes to completion, you can rest easy knowing that all you need to do is wait for a telephone call from your solicitor.
They’ll confirm the completion, which means the mortgage and deposit will have transferred; this happens electronically between the solicitors’ bank accounts. If all goes according to plan, you can collect the keys from the estate agent and say hello to your new home.
Friday is a popular day for completions, as it means you have the weekend to find your feet in your new home. This also means it’s a busy day for removal companies, so make sure you organise your moving day well in advance.
You’ve finally reached that light at the end of the tunnel. Sure, there’s plenty to organise now that you’re a proud new homeowner, but for the time being, order that takeaway, crack open the bubbly and savour the moment.
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