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Exchanging contracts happens towards the end of the conveyancing process when both the buyer and seller sign their contracts and exchange them to transfer ownership of the property.
This is a vital part of the conveyancing process as not only does it make the buyer the legal owner of the property, but it also makes it incredibly hard for both parties to back out of the sale. Once the contracts have been signed and exchanged, the transaction is legally binding.
To further explain the process, we’ve put together this guide to help explain everything you need to know about exchanging contracts. From how to get started to how long it takes, we’ve got you covered.
Exchanging contracts will happen after your conveyancer has enquired about the relevant property searches but before completion day. Contracts will usually be exchanged between 7-28 days prior to the completion date, although it’s sometimes possible to exchange contracts on the same day as completion.
You can only exchange contacts after you/your conveyancer has:
Agreed on an Offer – Agreeing on a price is part of the contract as it’s establishing exactly which fixtures and fittings will be included in the sale of the property. Only once the seller has agreed and accepted an offer will you exchange contracts.
Had Your Mortgage Agreed – After you’ve had your mortgage application accepted and offered to you, you can exchange contracts.
Undergone Property Searches – Your conveyancer will enquire about property searches to discover vital information on the property and area you plan to buy in.
Agreed the Date of Completion – A date for completion will need to be agreed upon by both the buyer and seller before you can exchange contracts. This is important if you’re in a property chain or if you already have a move-in date established.
Read and Understood the Contract – You should thoroughly read through the contract to ensure you’re happy with everything that has been included. Your conveyancer will help you break down and understand the contract.
Before exchanging contracts, both the buyer and seller are legally allowed to back out of the sale. Once the contracts have been exchanged, it’s notoriously difficult to pull out of the sale, with the seller being legally obliged to sell the property to the buyer.
Once both sides have exchanged contracts, this will officially transfer ownership of the property from the seller to the buyer. As previously mentioned, your conveyancer will carry out most of the work on your behalf, requiring only your signature on crucial documents.
Your conveyancer or solicitor will exchange contracts on your behalf. Contracts are exchanged by both the buyer's and seller’s conveyancers who will also read out the documents on a recorded phone call. This ensures that they’re identical. The contracts will then be sent out in the post and exchanged between both conveyancing solicitors.
However, it’s important to remember that exchanging contracts in a property chain is more complicated. Your conveyancer can only exchange contracts on your behalf when all the transactions in the chain are ready to continue, potentially causing a delay in your conveyancing case.
Exchanging contracts usually happens during week 8 of the conveyancing process, but this can vary depending on how quick your conveyancer is and whether or not you’re in a property chain. Usually, it should only take up to a day to complete the process.
The exchange of contracts will happen between 7-28 days before the day of completion, but it’s possible to both complete and exchange contracts on the same day if you’re a cash buyer or are chain free.
If you’re in a property chain, you will have to wait for the first transaction in the chain to exchange contracts. They will inform the next person in the chain that they have confirmation to go ahead and they can then exchange their contracts. If you’re last in the chain, you might not exchange contracts until as late as 5pm that day.
There are many things that could cause a delay in the exchanging of contracts process. To avoid these delays, simply follow these top tips to help speed up the process and get the ball rolling:
Avoid Property Chains – Being in a property chain that contains three or more transactions will significantly slow down the whole conveyancing process. If one person was to back out or faces delays, this will affect your process too. By not being part of a chain, you can exchange contracts quicker. When enquiring about the property, see if you can uncover any information concerning the seller’s situation and whether or not they’ll be buying a house as well as selling, lengthening the property chain.
Choose the Right Conveyancer – If you take the time to find a conveyancer that’s fully regulated by the CLC, SRA or the Law Society, then you’re guaranteed an efficient process. By using a comparison website like Compare My Move, you'll be provided with verified and trusted conveyancers to choose from.
Consider Online Conveyancing – Whilst many people doubt the legitimacy of online conveyancing, all online conveyancers featured on comparison websites will be regulated by the CLC, SRA or the Law Society. Online conveyancing is noticeably quicker than traditional conveyancing as everything can be easily tracked online.
Organise Your Mortgage – You’ll want to stay on top of your responsibilities and begin your mortgage application before searching for a property. If you’re still waiting around for it to be accepted after finding a property, then this will ultimately delay the exchanging of contracts.
When you exchange contracts, as a buyer, you will be required to pay a 10% deposit of the property price. The amount of deposit that you pay will vary depending on your situation, with 5% deposits being occasionally accepted.
The amount of deposit to be paid during the exchange of contracts will be confirmed and agreed upon during the recorded phone call between conveyancers. If you’re a buyer, you should make sure you have the funds readily available to speed up the process.
Once the contracts have been exchanged, you’ll have an agreed waiting period in which both the buyer and seller must get everything in order, ready for the completion date.
After exchanging contracts, the buyer should:
After exchanging contracts, the seller should:
To save both time and money throughout your conveyancing process, Compare My Move will connect you with up to 4 licensed conveyancers or conveyancing solicitors to help take away the stress. We only work with fully regulated solicitors and conveyancers to give you extra peace of mind and a first-class service.