As a buyer or seller, the exchange of a property sale is a crucial step in the process of buying or selling a property. It is the point at which both parties are legally committed to the transaction and cannot back out without suffering financial penalties.
Exchange
The exchange of contracts is the process whereby the buyer and seller of a property sign identical copies of the contract and then swap them. Once this has been done, both parties are legally bound to the terms of the contract. The buyer must pay the agreed deposit, usually 10% of the purchase price, and the completion date is set.
Before exchange, the buyer’s solicitor will carry out searches and checks to ensure that there are no issues with the property that could affect its value or the buyer’s ability to use it as they intend. They will also ensure that the seller has the right to sell the property and that there are no outstanding debts or charges on it. Once these checks have been completed, the buyer’s solicitor will send a report to the buyer outlining any issues that have been identified. The buyer can then decide whether or not to proceed with the purchase. If they decide to proceed, they will sign the contract and pay the deposit.
The seller’s solicitor will then check that the buyer has paid the deposit and that their client is happy to proceed. Once this has been confirmed, the contracts are exchanged and the completion date is set.
Completion
Completion of a property sale is the final step in the process of buying or selling a property.
Completion is the day when the balance of the purchase price is paid and the keys to the property are handed over to the buyer. This is usually a couple of weeks after exchange, although it can be longer or shorter depending on the circumstances.
Once completion has taken place, the property officially belongs to the buyer. The seller must vacate the property, and the buyer can move in. The buyer’s solicitor will register the transfer of ownership with the Land Registry, and the sale will be complete.
