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While having your offer accepted on a property is an exciting time, nothing is guaranteed until you have exchanged contracts. If you are in the process of looking for a new home to buy, it’s important to understand what’s involved in exchanging and completing your new home.
The exchange occurs when the two solicitors representing the buyer and the seller exchange signed contracts, and the exchange deposit is paid by the buyer. At this point, the agreement to buy or sell the property will become legally binding and neither the buyer nor the seller can back out of the deal. Read on to find out more about the typical timelines and processes involved with exchange and completion, what you need to do to prepare, and what’s actually involved.
Once the offer has been accepted by the seller, several necessary steps must be taken before the contracts can be exchanged. Being organised, proactive, and communicating well will help you avoid any hold-ups and reduce the risk of the sale falling through. Here are the necessary steps for each party involved in the process.
During this process, there are several things that buyers need to do to prepare for exchange and completion. These include:
To prepare for the process, your solicitor should:
The seller should do the following:
The seller’s solicitor will also have some steps to take to prepare for exchange and completion, which include:
Contracts can be exchanged once the buyer and seller have all the required paperwork in place. The buyer and seller need to both sign identical documents, which are exchanged at a set time by the solicitors. The exchange may be done over the phone; your solicitors will read the contracts to you and get your agreement before exchanging them. The buyer will also need to pay an exchange deposit to the seller, which is usually set at 10% of the property price and might be different from the amount of mortgage deposit you are paying. Your solicitor might be able to negotiate this deposit down to 5% if needed.
The time between exchanging and completing can be anything from a couple of weeks to several months and is usually the longest part of the process of buying a home. You can speed the process sup by responding to queries quickly, being well-organised, and informing your solicitor and estate agent if you plan to go away. After exchanging contracts, your solicitors are legally bound to ensure that the completion date is upheld. Completion dates are generally set at two weeks after exchange, although this is just a guideline and it’s possible to ask for more time if nobody is in a hurry to move. Sometimes, the sale can be completed in less than two weeks.
When it comes to the best day for completion, most people choose a Friday since it gives you the weekend to get settled into your new home – but since it is the most popular option, bear in mind that Fridays tend to book up quickly. The time between exchange and completion is often used to get ready for moving into your new home, particularly when it comes to the practical aspects.
While it’s possible to exchange and complete on the same day, this is not very common. It allows you to move without delay and means that you can avoid paying the exchange deposit. However, you will need to be ready to move on the day that you exchange, which can be tricky. It also gives you less time to fix anything that might go wrong.
Understanding the exchange and completion process is crucial if you are planning to purchase a home.
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