Everything you need to know about exchange & completion

Written by Mathew McCorry

If you read my property blog now, that’ll be the end of it. I will not look for you, I will not pursue you. But if you don’t, I will look for you, I will find you and I will make you read it.

When you’re in the process of buying or selling a property then you’ll know there is a whole load of process to go through, and a part of that process is exchanging and completion. People often get confused about what exchange and completion means, often not understanding the difference or getting them mixed up.

We’ve written this guide to explain exactly what they are and everything you need to know:

Exchanging

What is exchanging contracts?

The exchange of contracts is when the two parties, the buyer & sellers legal representatives provide each other with the signed contracts, which at this point the buyer of the property will pay the deposit that is due.

At this point in the process is the first point that you will be legally bound to buy or sell, you can’t back out so you need to ensure you are 100% happy with everything.

Preparing to exchange

So, you’ve finally got the point of exchange, if you’re going through a traditional method of selling then it can take a long time to get to this point. You might be eager to push things along at this point, but there are several things that need to be in place before exchange can happen. As a seller you need to ensure that you have:

  • Fill in all the necessary fixtures and fitting forms to your best knowledge
  • Inform your buildings insurance, local council and everything else you may need to cancel
  • Make sure all your paperwork in relation to you house is together and with your solicitor


As a buyer you need to ensure that you have:

  • That you’ve had a survey done and highlighted any issues with the seller, which you can use to negotiate
  • Have your mortgage offer in place
  • Arrange building insurance
  • Checked through all the searches you should have had completed, so you can question anything about the property
  • If it’s a leasehold, read the lease very carefully and question anything you are unsure of

When does exchange it take place?

Once both parties are happy, and have signed the contracts, exchange is ready to take place. The documents provided for signing will be identical for both the buyer & seller, it’s often requested that you sign and send the original copy, not a scanned one.

What is an exchange deposit?

When exchange takes place, the buyer will have to pay the agreed deposit, this is typically around 10% of the property’s value but it depends on what you’ve agreed with your mortgage provider.

This can be made slightly more complex by a Help To Buy ISA, but as long as you make your solicitor aware of this as early as possible then it shouldn’t present an issue.

Completion

What is completion?

The completion comes after the exchange, it’s the date that you finally get to move into your new home, as buyer, or the date you finally move out as a seller. At this point the estate agent will hold the keys for you.

This is also the point at which the solicitors exchange the money, which may be redeemed from the mortgage company.

Arranging a completion date

This is fairly self-explanatory, it’s the date that you agree to complete on the purchase. It can get pretty complex if you have a large property chain as ideally all buyers and sellers in the chain should complete on the same day.

When is the best day to complete?

Everyone has a different opinion on this, but they all agree that the worst day to complete is Friday. Most people choose Friday to complete as it means you get the weekend, but as this is the most popular day to complete it often means that solicitors are extremely busy & removals can be more expensive. Another reason for not choosing a Friday is that if it doesn’t complete on time, you’ll have to wait the weekend and complete on the Monday.

If you can complete earlier in the week it will often lead to less complications and make for a generally quicker process meaning less hassle.

What happens when you complete?

It’s reached your agreed date, here’s the process of what is likely to happen:

  1. As a buyer you must sign the transfer deed and documents
  2. Your solicitor will be on with transferring the final funds from the two parties
  3. The solicitor will complete a transfer form to change the ownership with the Land Registry
  4. The solicitor will communicate with the estate agent as to when you can collect the keys and the seller will be leaving the property
  5. You’ll get a call from your solicitor when you are able to go pick the keys up

Further Questions

Can I change my mind after exchange?

Technically you can pull out of the purchase or sale after exchange, but it’s not advised. As a buyer you will lose your deposit, but as well as this the seller may be able to claim any damages against you.

From a seller’s perspective the deposit is to be repaid to the buyer, the buyer will have to return the documents to the seller at the seller’s expense.

The person who didn’t pull out can also sue for breach of contract and loses, they can try get back any conveyancing costs, mortgage costs, survey costs, rental charges or deposits paid for removals if applicable.

Can I exchange and complete on the same day?

Technically speaking yes, but whether or not it’s a good idea is another question entirely. Exchanging and completing on the same day presents several risks and often isn’t possible, especially if there is the redemption of a mortgage involved.

How long do exchange and completion take?

On an average it’s 1-2 weeks, but it can take much longer if there are delays which can often happen if the property chain is quite large.

Can you speed up exchange & completion?

The only thing you can really do is ask your solicitor for advice, see if there is any way they think you can speed up the process, they may be able to negotiate with the other parties solicitor to try and speed up the process.

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