What Happens Between Exchange and Completion?
The time between exchanging contracts and completion should be used to make final arrangements in the conveyancing process. It is the point when the transaction becomes legally binding. This means that no party can back out without facing legal consequences.
The legal process can be challenging, especially if you have not purchased a property before. Therefore, learning about each party’s role can give you the confidence and assurance to proceed with your transaction.
In this guide, we’ve gathered everything you need to know about the time between the exchange and completion. Whether you are buying your first property, or selling a house as part of a property chain, you’ll know what to expect.
- Exchange of Contracts Explained
- Completion Day Explained
- What Do Solicitors Need to Do Between Exchange and Completion?
- What Should I Do Between Exchange and Completion?
- What Will the Estate Agent Be Doing?
- Why is There a Gap Between Exchange and Completion?
- What Can Cause a Delay Between Exchange and Completion?
- When is the Buyer’s Deposit Paid?
- Finding a Conveyancer
Exchange of Contracts Explained
At the exchange of contracts, the transaction becomes official. The buyer and seller will sign identical contracts agreeing to the transfer of funds and ownership.
If either party wishes to withdraw following this stage, they will be liable for financial and legal repercussions. The exchange of contracts typically happens over the phone, but it can occur in person.
Once the signed contracts have been exchanged, the buyer’s and seller’s solicitors will agree on a completion date. All legal paperwork should be prepared and submitted for completion to take place.
The buyer’s solicitor should have a copy of important property information. This includes the buildings insurance policy, mortgage offer, and proof of cleared deposit funds. The seller’s solicitor should have a copy of the TR1 form.
Read more on the Conveyancing Process for Buying a House
Completion Day Explained
Completion Day marks the end of the conveyancing process and takes place on an agreed date. At this stage, the seller should receive the full payment from the buyer.
The transaction will reach completion once the seller’s solicitor has confirmed and verified the buyer’s funds. It marks the legal transfer of ownership from the seller to the buyer.
The buyer collects the keys from the estate agent and is able to move in. The seller should have vacated the property and removed all belongings.
The buyer’s solicitor will then pay any Stamp Duty on their behalf and register them with the Land Registry. However, it is up to the buyer to check that the payment has gone through and the ownership has been registered.
The seller’s solicitor will pay the estate agent’s fees on the seller’s behalf.
Most completion days are arranged for Friday. This means that estate agents, mortgage lenders, and solicitors tend to be extremely busy. However, exchanging on another day in the week comes with the benefit of not being as busy. This means you’re more likely to be able to complete the transaction earlier in the day.
It will also give you more time to get accustomed to your new home rather than trying to sort through all your belongings over a weekend.
If you are part of a property chain, completing earlier in the week can minimise the risk of bank transfer delays.
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What Do Solicitors Need to Do Between Exchange and Completion?
Solicitors ensure that all legalities have been followed in the run-up to completion. Once contracts have been exchanged, most of the legal work will be complete. This includes negotiations and conveyancing searches.
However, there are some final tasks that your solicitor will have to do before completion. This ensures that the transfer is as smooth and efficient as possible.
Buyer’s Solicitor
The buyer’s solicitor will have to liaise with the mortgage lender in order to transfer the money over to the buyer on completion. They must make sure that the funds are ready to be transferred to prevent any delays.
They also must prepare a final completion statement. The statement will contain the agreed terms and conditions as well as financial information.
Seller’s Solicitor
The seller’s solicitor will reach out to the buyer’s mortgage lender to confirm the redemption amount. This authorisation ensures that the buyer receives the funds on completion.
They will also prepare a final completion statement. The financial information and conditions should match those found in the buyer's statement. This prepares the final transfer of property ownership between the buyer and seller.
What Should I Do Between Exchange and Completion?
How you spend the time between exchange and completion is dependent on your circumstances. First-time buyers will most likely be ready to move into their new home. Those who are buying and selling will need to arrange somewhere to stay if they are moving into their new property after selling their property.
Once exchanged, the contracts are legally binding. Either side can face financial penalties if they choose to withdraw from the sale past this point. The time between exchange and completions allows the buyer and seller to make the appropriate arrangements.
If You’re a Buyer
Buyers should use this time to pack their belongings, so they can be moved into the new property. Being organised and keeping an inventory of your belongings will ensure that you are prepared for moving day. It’s important that any valuable or fragile items are packaged securely to avoid any damage during transit.
Hiring a removal company will ensure that your belongings are securely moved. Removal companies take the stress out of your move and ensure that moving day is as efficient as possible. Professional movers will also be able to assist in carrying large or heavy items of furniture. They will also use equipment to load and unload your goods securely into the vehicle.
Some companies even offer full packing services at an extra cost for those who want to minimise the amount of work and stress.
Buyers should also prepare to change addresses and utilities. This includes mail redirection via Royal Mail, home insurance, and contents insurance. You will also need to inform your broadband suppliers. Doing so in advance will reduce the risk of your utility bills running over in your old property.
It’s also advised for buyers to check their EPC (Energy Performance Certificate). This provides information on the energy efficiency of the building.
If You’re a Seller
Sellers have to make sure that they are prepared to vacate the property on the date of completion. If the seller has not moved out yet, they will also have to make similar moving arrangements as buyers.
They must also make sure that the property is kept in the best condition such as ensuring that all fittings and fixtures are in good condition. Other arrangements include taking final meter readings.
The estate agent must receive all copies of the house keys prior to completion day. This is regardless of whether they have arranged to move into their new property or not. If the seller refuses to hand over their keys, they could face legal action.
Read more about Moving House Etiquette
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What Will the Estate Agent Be Doing?
Estate agents keep a moving timeframe to ensure the transaction is always pushing forward to completion. While they tend to act in the seller’s best interests, they are also able to provide updates for the buyer and act as a mediator between the parties.
Here are some of the jobs to expect from your estate agent:
Liaising with relevant parties
Estate agents liaise with parties on the buyer and seller’s sides. This allows them to update the buyer or seller on where all parties are throughout the process. Some estate agents even have specialist sales teams whose job is to work with the parties’ solicitors.
Arrange software for tracking progress
Some estate agents will encourage the use of tracking software that allows all parties to track the conveyancing process. If there are any delays, this software can shed some light on the issue.
Negotiate when problems arise
Problems such as negative surveys can arise. In these instances, the seller’s agents will aim to negotiate with the buyer’s solicitor.
If there are problems highlighted, the buyer may renegotiate their offer before agreeing to proceed. Estate agents will be able to give the seller expert advice in these cases.
Why is There a Gap Between Exchange and Completion?
The time between exchanging contracts and completion allows all parties to get organised. Typically, this gap is up to 2 weeks which means that both parties can pack up their belongings and hire a removal company.
The buyer can arrange their mortgage and ensure that all redirections of mail have been arranged.
There is the possibility to exchange and complete on the same day. However, this is less common and means that all parties must be prepared to move. Dealing with a simultaneous exchange and completion requires all parties to be proactive.
This can cause problems for sellers who have not prepared to move out. However, sellers who have already vacated their property are more likely to push a quick transaction.
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What Can Cause a Delay Between Exchange and Completion?
Prolonged money transfers are the main cause of delays between exchange and completion. This can happen if the buyer is purchasing the property with a mortgage. In these cases, the money has to be sent to the seller’s solicitor via the mortgage lender and the buyer’s solicitor.
This transfer chain can lead to delays, especially if the lender transfers the money later in the day. Transfers that are made in the afternoon may mean that completion may be delayed until the following weekday.
Read more on What Happens After Exchange of Contracts
When is the Buyer’s Deposit Paid?
The buyer typically pays their house deposit when the legal contracts are exchanged. This usually ranges from 5% to 10% of the property price and is sent to the buyer’s solicitor who will then send it on to the seller’s solicitor.
It’s best to ask your solicitor at the start of the process when the deposit needs to be paid. This allows you to budget accordingly as property chains can sometimes prolong the payment phase.
The deposit is paid before completion as a means of security for the seller. However, the seller cannot access the deposit until completion. If the buyer withdraws between exchanging contracts and completion, the seller is entitled to the deposit.
The unpaid purchase price is then paid on completion. This will either be via cash for cash buyers or using mortgage funds from lenders.
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Finding a Conveyancer
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