As you are no doubt aware at this point, selling a house is an involved, complex and often lengthy process. You’ve thought, planned, acted… and did more than your share of waiting! It is important that each step is executed properly and in its time. When it comes to the exchange of contracts, it seems like a clearcut step – and one that signals that you are very close to the finish line. Well, yes and maybe. This part of the process can be a little more complicated than you thought.
It’s an exciting time but also one that is a bit overwhelming. Learning as much as you can, though, helps both streamline the process as much as possible and calm your nerves a bit. That said, what do you need to know about the exchange of contracts?
What Is the Exchange of Contracts
Not to be too on the nose, but this is when you exchange contracts! With a conventional sale, the solicitors representing the buyer and seller exchange documentation that states that an agreement has been reached in terms of the property purchase. Up until this point, even though an offer has been made and accepted, it is not legally binding. The buyer can simply walk away, putting you back to square one. Conversely, you can pull out if the deal does not meet your needs – put you back to square one.
When contracts are exchanged, the deal is legalised. To pull out at this point is to incur significant penalties. Generally, though, after this step is done, everyone heaves a collective sigh of relief. You can begin to relax a bit.
Because the contracts, when signed, are legally binding, it is essential that every detail is checked and rechecked to ensure everything is in order. The contract indicates that an offer has been made and accepted, relevant forms have been filed (e.g. TA6 and TA 10), surveys have been completed, the valuation has been done, the conveyancer has done searches, the EPC is in order, funding is approved and confirmed, buildings cover is in place and a completion date is set.
When Do You Exchange Contracts?
Typically, the exchange of contracts occurs between one to four weeks prior to the completion date. Can you exchange contracts and do completion on the same day? Yes, technically you can if the lender agrees to it. Many require a minimum of five working days between the exchange of contracts and completion. Even if they do agree, however, the issue is that you have to be packed up and out the same day you sign the contract. Will you be ready for that?
How Does This Work?
On your end, there’s not much to do (other than pack!). Your solicitor will handle the contracts, usually via a recorded phone call between both parties’ solicitors. The contracts are ready to ensure they are the same. They then post the contract to the other solicitor for finalisation.
Next, you breathe! The uphill climb you’ve been tackling has plateaued, and you’re almost done. Prepare for your move, arrange change of address and register a transfer of ownership with the Land Registry (or have your solicitor do so on your behalf).
As mentioned, completion typically follows between a week to four weeks after exchanging contracts. Completion day – or moving day – is a step that involves the buyer transferring funds to you as the seller, handing over the keys and moving on to the next stage of your life.
You’ve worked hard, and waited a long time, for this moment to come. Enjoy!
Can You Streamline This Process?
A traditional sale (i.e. one that involves estate agents, listings, marketing, financing from lenders, etc.) can be lengthy and ill-suited to the needs of some people. For example, you may need to sell your house on an accelerated timeline for various reasons, or your house may not be in good or even fair condition. What do you do?
In this case, it may make more sense to work with a reputable cash house buying company. They have the funding in place to affect a fast purchase, and they handle all of the details that generally take so long, from instructing valuations and surveys to dealing with solicitors. All of these costs are covered by the buyer, so you can focus on arranging your move and on your next steps.
Moving from your initial request for an offer to completion takes just days. There is far less waiting (and wasted resources and money).
Is this the right move for you?