Exchange of Contracts
The term exchange in respect of a sale or purchase, refers to the exchange of contracts that takes place between the buyers’ solicitor, and the sellers solicitor. Once an exchange has taken place, this creates a legally binding contract meaning that both the seller and the buyer are obliged to both sell and buy the property, on the agreed completion date.
When an exchange of contracts takes place, the content of the contract is agreed by both parties’ solicitors as well as the completion date. The completion date, along with the time and date of exchange is recorded on the contract.
If either the buyer or seller pulls out of the transaction after exchange of contracts, there are penalties in place. For instance, as a buyer your deposit may be lost.
Prior to exchange taking place, your solicitor will arrange with you to sign the contract, in readiness for when exchange occurs. You will also need to ensure that your deposit funds have been sent to your solicitor prior to exchange, as the deposit will be held by your solicitor until completion.
You do not need to be present when an exchange takes place, however your solicitor will contact you to obtain your authority beforehand. Without your authority, your solicitor cannot exchange.
It is also extremely important that you arrange your buildings insurance to start from the date of exchange, as opposed to the completion date. This is because you will then be covered between the period of exchange and completion.
Completion
Completion is the last stage of the transaction.
When completion takes place, this means you have now purchased the property and are the legal owners. On the day of completion, funds are sent to the seller’s solicitors, and the ownership is transferred to you. With this said, please wait for your solicitor to confirm when completion has specifically taken place as the purchase funds have to make their way to the sellers solicitor, and if there is a chain involved, this can sometimes take a little while.
Once completion has taken place, you will receive confirmation from your solicitor, as well as a completion letter.
Your solicitor will then arrange to make sure everything is registered at the Land Registry and once the Land Registry is updated, new copies of the title documents will be provided to you.
We understand that buying or selling a property can sometimes be overwhelming. At Timms we are committed to making the process as clear and seamless as possible. If you would like to discuss any details further, or request a free no obligation quote, please contact us on 0800 011 6666.
