Exchange and Completion Made Easy

When contracts are exchanged, the contract becomes legally binding and all parties to it, are bound by its terms.  Therefore, any period leading up to this, any party may rightfully withdraw from the transaction without notice. However, an exchange can only be achieved when all legal matters have been finalised. Legal ownership will transfer from the vendors to the purchasers on completion which can be the same day as exchange or a date in the future.

A property chain is when there is a a sequence of linked property purchases, each of which is dependent upon the preceding and succeeding purchase. Where there is a chain, exchange of contracts cannot be achieved until all parties have confirmed the readiness of their file.

The actual process of exchanging contracts is dealt with in a telephone conversation between both representing solicitors. Both solicitors have a duty to verbally confirm each term of the contract which will include:

• Parties (Seller/Buyer)

• Property address & title number (if registered)

• Purchase price

• Deposit (usually 10%)

• Date of completion

• Any special conditions agreed

• Date and time of exchange

• Names of solicitors who exchanged contracts

Once contracts are exchanged, both parties are contractually obliged to proceed to completion. If either party does not proceed they may be liable to incur a financial penalty which can be expensive. If the purchaser’s withdraw, they risk losing their deposit, also.

When contracts are exchanged, a date for completion is inserted into the contract and the purchasers solicitors will request funds from their client’s lender. Completion usually takes place a week after exchange as this is how long it usually takes to request funds. This is the day the vendors must vacate the property and the day the purchasers will take legal ownership. Your solicitors will usually agree a date which will be confirmed by all parties mutually right before contracts are exchanged. The purchasers solicitors will send funds and the vendors will confirm receipt, upon which keys will be released.

It is crucial that the date for completion agreed on exchange is realistic and can be achievable by all parties to avoid any difficulties on the day. The vendors will have to be prepared to vacate the property and the purchasers must have their funds ready to avoid any difficulties. A failure to complete can have serious consequences and it is important to be prepared for both exchange and completion.

If you require any further help, please contact us for more.