Exchange of contracts is when a buyer puts down a deposit, and the sale/purchase of a house is set in stone. Completion is when the full payment is sent to the sellers’ solicitor, and ownership transfers to the buyer.
Find out more about this process, and how to complete with ease, here.
What is Exchange of Contracts?
Exchange of contracts is when the two solicitors representing the buyer and seller of a house swap signed identical contracts, and the buyer pays a deposit – usually 10%. At this point, you can’t back out of the deal as the exchange of contracts is a legally binding act.
More often than not, exchange takes place over the phone, with both solicitors reading out the contracts – which are then sent to the other in the post.
This all needs to be done on the same date. If that doesn’t happen, the exchange process will have to be restarted.
What Needs to Be Done Before Exchange of Contracts?
Before you exchange contracts, make sure you are confident that everything is sorted and correct. The Home Owners Alliance has compiled a list of things you should do before exchanging contracts:
- You have agreed on an offer, including for fixtures and fittings.
- You have had the mortgage valuation and any surveys you want.
- You have been formally offered a mortgage in writing.
- You have arranged funding for the mortgage deposit.
- Your conveyancing solicitor has done all relevant searches.
- You have organised building insurance. After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place before hand.
- You have sorted out funding for the contract deposit (traditionally 10% of the purchase price, but nowadays often less).
- You have agreed on a date of completion for the sale, which will be written into the contract.
- You have read, understood and signed the contract.
Until the exchange of contracts, both the buyer and seller of the home can pull out of the deal without serious financial implications.
When this process is complete, you and your solicitors will agree on a completion date – the date in which you move. It is important that when you set a completion date it is achievable for everyone.
What Happens Between Exchange of Contracts and Completion?
Once you’ve set a completion date, you can look into arranging a removals team and (if required) storage services . You will be unable to arrange this until after you have the completion date.
Make sure you arrange for a transfer of services – like your broadband suppliers – and change your address where required. For an in-depth guide in who to inform when moving house, check out Aled’s article answering this question.
This is also a good time to pack. We’d recommend that you pack in advance and ensure that the boxes are clearly labelled, as this will make your life much easier when you unpack. This can be rewarding, but it is also a stressful process – there are ways to reduce stress when moving house.
What is Completion?
This is the date you complete the full payment and are able to move into your new home.
On completion date, the go-to time to collect keys is usually 12-1pm. Keep in contact with your solicitor and estate agents to ensure keys are available at this time, or it can slow things down for everyone in the chain – including your removals team.
Remember that the keys cannot be released at all until you’ve completed full payment.
How Long After Exchange of Contracts Is Completion?
The time it takes to go from exchange to completion is decided by the buyer and seller. Legally, the exchange of contracts and completion can be done on the same date but this is unusual; the date of completion is more often one week to two months after the exchange of contracts.
This is because, once exchange is complete and you’ve set moving date, you normally need to be out at 12pm.
Anything Else?
Make sure that your removals team have access ahead of the move. This could include giving them access codes or moving your car. Most companies will need enough access for a large van to load.
If you need an experienced and reliable removals team, with over 130 years experience, take a look at our website and reviews, or contact us for more information.
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Written by Holly Charman, for Falconer Removals.
