Moving house is an incredibly exciting time and having an offer accepted puts you one step closer to finding your dream home. However, nothing is guaranteed until you have exchanged contracts and completed the transaction - which can often be a long process.
The exchange and completion phase is mainly down to the solicitors to take care of, but it is good to understand what is going on for yourself and what is involved in exchanging and completing on your new home. Let’s dive in…
What happens during the exchange process?
To exchange within the process of buying a new home is to exchange contracts; this is when two legal firms, one representing the buyer and one representing the seller, exchange signed contracts with one another and the buyer pays down their deposit.
This is when the transaction phase starts to get real, as once the contacts have been signed and exchanged, it becomes legally binding. Your contract will include:
● Buyer details
● Seller details
● Completion date
● The price that the property was sold for
● An outline of what is included in the price
What can the buyer do within the exchange process?
Up until the point of exchanging contracts, a few boxes have to be ticked and it is vital that as a buyer, you are proactive and organised and you maintain communication with your agent in order to avoid any delays or a risk of the property falling through. You will already be aware of what your solicitor is or will be doing next, but for the buyer, here is an outline of things you can do prior to exchanging to help the process:
● Have an independent house survey carried out. This will identify if there are any serious issues within the property that would ultimately impact the negotiation of the house price
● Have a written mortgage offer
● If the property you are purchasing is leasehold or share of freehold then you must carefully read the lease and discuss any concerns or queries with your qualified solicitor
● Your buildings insurance must be in place from the date of exchange, therefore as the buyer you must arrange this beforehand
● When you receive the results of the searches from your solicitor (this will present checks on both the property and the area you are buying in) raise any concerns or queries there and then
● Before ultimately, you sign your contract!
What’s next? An exchange deposit
Once both contracts have been exchanged, the buyer then is required to put down a deposit payment to the seller. This would typically be 10% of the price of the property. (Note: this may be different to the amount of mortgage deposit that you put into the property).
The deposit is in place to prove to the seller that you are definitely going to purchase the property.
Next up - Completion
The completion stage is when the ownership of the property is transferred from the seller to the buyer. On the day of completion, both parties (the buyer and the seller) must fulfil the terms of the contract, and the seller must vacate the property and execute a deed of transferring ownership.
The seller must leave all of the items agreed within the contract and leave the property in good condition before the buyer will pick up the keys from the agent and begin the moving in process.
How long can exchange and completion take?
The time span between both the exchange and completion can vary based on the circumstances of the particular case. However, ideally you would exchange 7 to 28 days before completion.
Setting a completion date:
The choice of a completion date can depend on how many properties are in the chain and each buyer and seller’s circumstances.
When is the best day to complete?
Typically, most property completions take place on a Friday. This gives you the weekend to settle into the property.
What happens after completion?
Completion day for the buyer of a property is very straight-forward. You will receive a phone call from your solicitor, letting you know that your mortgage and deposit has been transferred to the seller and the completion has taken place. You will then receive the keys from your agent and start the moving in process!