Contract Exchange and Completion When Buying a Home

Both parties in a house purchase, the buyer and the seller, are legally able to pull out of the deal right up until the contracts are exchanged. This can make the house buying and selling process incredibly stressful for all involved.

The following guide explains contract exchanges and how house purchases are legally completed. This aims to help you understand your rights during the sale and purchase of a home and how to prepare successfully for your purchase or sale.

Things to Consider Prior to Exchange

Exchanging contracts is a legally binding aspect of the completion of a house purchase, and so all parties must be certain that they want the sale to go ahead before they sign to complete. To be confident that all considerations have been met prior to signing, it is wise to tick off the following necessities:

• Have all searches been completed?
• Does the buyer have their mortgage offer in writing?
• Are the deposit funds in place and available for transfer?
• Has a completion date been agreed by all parties?
• Has the contract been fully read and any questions answered by the solicitor?
• Do all parties fully understand what is included in the offer? - Will fixtures and fittings be included, for example? All such matters should be confirmed in writing.
• Does the buyer have indemnity insurance to cover any wasted costs in the event of the seller pulling out before contracts are exchanged? If not, do they require it?
• Is the Energy Performance Certificate (EPC) available to the buyer for their new home?

Exchanging Contracts in a House Purchase

When it comes to the point of exchanging contracts, the solicitors of each party will read out the contracts by phone and record the conversation. In doing so, the solicitors will ensure that both contracts are identical and once this has been done, they will be posted to each other. Once the contracts have been signed, read and exchanged, the property purchase will be legally binding. At this stage, the buyer should carry out the following:

• Contact the freeholder if the property is a leasehold to tell them that they are the new owner
• Ensure that the solicitor or conveyancer has registered the change of ownership of the property with the Land Registry.

What happens on the completion date?

The completion date is the day when the buyer can move into their new house. In most cases, the estate agent will hold the keys to the property for the new owner to collect. On the date of completion, the solicitor will arrange for the purchase funds to be transferred to the solicitor of the seller.

What is the likely time between exchanging contracts and the date of completion?

The time that it will take between you exchanging contracts and the date of completion can vary considerably. The greatest determining factor for this will be whether either party is in a chain, as this may impact on when a seller can leave their property and a buyer move in.

The average time between contract exchange and completion is two weeks. But it really depends on the circumstances. Some buyers or sellers may ask for more time to pack up their belongings and prepare for the move. So the completion date will be a process of negotiation between the buyer and seller, which will usually be taken care of by the conveyancing solicitors involved in the transaction.