The exchange of contracts is the exciting part of moving into a new property. It is one of the last steps you have to encounter before you get your new pair of keys. Nevertheless, it can be one of the trickiest parts of the sale process. This article intends to look at the ins and outs of exchanging contracts.
Why do we need to exchange contracts?
Exchanging contracts makes the whole sale legal. Before exchanging contracts, neither party have the obligation to buy or sell their property, and they would be able to pull out of the sale without any kind of penalty. Both parties sign contracts that are identical, but these only become legally binding once a solicitor has dealt with the contract. Between the exchanges and completion, either side there is an almost certain chance that either party have had to pay major penalty if they do decide to pull out. Although, this is an extremely rare case. Usually, once the exchange of contracts is finished, you can have a sigh of relief.
Why do I exchange contracts?
The usual time period between exchanging contracts before completion is 7-28 days. Although, there is a method you can take to complete within a day. As a contract is legally binding, the following must be in place before you exchange:
- You need to have an agreed offer
- You have had any surveys or mortgage valuations done
- A formal letter of your mortgage is in writing
- The arranged funding for your mortgage deposit
- Conveyancing solicitor has done all the relevant research
- You have organised building insurance
- You have agreed a completion date for the sale
- You have completed the funding for a contract deposit
- You have read the contract, understood it and have finally signed
How do I exchange and complete on the same day?
Exchanging contracts on the same day is becoming increasingly common and possible. The obvious advantage is that it speeds up the process and a deposit on the contract does not need to be paid. Although, there is the downside of it being a stressful process and you don’t know the defiant date of when you move, until the day. This in turn makes removals challenging and more complex.
How do I exchange contracts?
When it comes to physically exchanging contracts, usually this is done by your appointed solicitor reading out the contract over the phone to the other solicitor involved in then sale. From this, the solicitors will send over copies of the contract. Once contracts have finally been signed and the solicitors have completed their process, then they will be legally binding. If you do not follow through with the sale, you can lose your deposit and could be sued. On the other hand, the seller has to sell or you can keep their deposit and then sue them.
What happens after exchanging contracts?
After the whole cycle of exchanging, then from here on everything should be plain sailing. The next step is the completion, which is when you pack up all your belongings and move into your new property. Before completion, there are a few jobs you must tick off your list:
- Tell companies such as utility companies, banks, and the government that you are moving
- Organise your post to be forwarded to your new address
- Register for the ownership with the land registry
- Do final checks with your estate agent checking nothing is damaged
- Send a copy of the title deeds to your chosen mortgage lender
How could The Property Buying Company help?
At The property Buying Company, we can complete any house sale and exchange of contracts in a time scale that suits you. We have an inhouse progressions team that can help speed up the process of a sale if you need to move quickly. Also, we cover all legal fees such as solicitors and surveyors. Interested in using our service use this page to find out how much your house is worth.