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Exchanging contracts happens towards the end of the conveyancing process when both the buyer and seller sign their contracts, exchanging them to transfer the ownership of the property from the seller to the buyer.
This is a vital part of the conveyancing process as not only does it make the buyer the legal owner of the property, it makes it incredibly hard to back out of the sale on both sides.
We’ve put together this guide with everything you need to know about exchanging contracts during the conveyancing process. From what happens once you’ve exchanged contracts to how long it takes, we’ve got you covered.
Exchanging contracts will happen after your conveyancer has enquired about property searches and before. Contracts will usually be exchanged between 7 and 28 days prior to completion day, although it is possible to exchange contracts on the same day as completion in some cases.
You can only exchange contacts after you/your conveyancer has:
Agreed on an Offer – Agreeing on a price is part of the contract, as is 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.
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 aboutto discover vital information on the property and area you plan to buy.
Agreed Date of Completion – A date for completion will need to be agreed on by both buyer and seller before you can exchange contracts. This is important if you are in a chain, or if you already have a move-in date established at your new property.
Read and Understand Contract – You should thoroughly read through the contract to ensure you are happy everything that has been included. Your conveyancer will help you understand the contract.
Before exchanging contracts, both the buyer and seller are legally allowed to back out of the sale at any time. 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 just your signature on important documents.
Your conveyancer or solicitor will exchange the contracts on your behalf. Contracts are exchanged by both the buyer and seller’s conveyancer reading out the contracts on a recorded telephone call, ensuring that they read identical. The contracts will be sent out in the post and exchanged between the buyer and seller’s conveyancer.
Exchanging contracts in a property chain is more complicated than a transaction between just one buyer and one seller. Your conveyancer can only exchange contracts on your behalf if all transactions in the chain are ready to continue the process, potentially causing a delay in your conveyancing case.
Exchanging contracts usually happens during week 8 of the, but this can vary depending on how quick your conveyancer is and whether or not you’re in a property chain.
The exchange of contracts will happen between 7 and 28 days before the day of completion, but it’s possible to complete the same day as exchanging contracts if you’re a cash buyer and not in a property chain.
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 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 exchanging contracts. Follow these tips to speed up the process of exchanging contracts.
Avoid Property Chain – 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 face delays, this will affect your process too. By not being part of a chain, you can exchange contracts quicker.
Choosing the Right Conveyancer – If you take the time tothat’s fully regulated by the CLC, SRA or the Law Society, then you’re guaranteed an efficient process. By using a comparison website, you'll be provided with verified and trusted conveyancers to pick from.
Online Conveyancing – Whilst many people doubt the legitimacy of, all online conveyancers using comparison websites will be regulated by the CLC, SRA or the Law Society. Online conveyancing is noticeably speedier than traditional conveyancing as everything can be easily tracked online.
Organise Mortgage – You’ll want to stay on top of your side of the process by ensuring you’ve started 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 delay exchanging contracts overall.
When you exchange contracts, as the buyer you will be required to pay a 10% deposit of the property price to the seller. The amount of deposit that you pay will vary depending on your situation, with a 5% deposit being accepted on occasion.
The amount of deposit to be paid during exchange of contracts will be confirmed and agreed during the recorded phone call between conveyancers. If you’re a buyer, you should make sure you have the funds readily available to further speed up the exchanging contracts process.
Once contracts have been exchanged, you will have an agreed waiting period in which both buyer and seller must get everything in order for the completion date.
After exchanging contracts, the buyer should:
After exchanging contracts, the seller should: