Back to: Homeownership
Exchanging contracts means you are legally committed to buying the property so you have to make sure you have everything in place beforehand so that nothing can go wrong. There are a range of things your conveyancing solicitor will do to ensure you are ready for the exchange of contracts.
The exchange of contracts can be done once:
- You have agreed on an offer, including for fixtures and fittings
- You have had the mortgage valuation and any surveys you want
- You have been formally offered a mortgage in writing
- You have arranged funding for the mortgage deposit
- Your conveyancing solicitor has done all relevant searches
- You have organised building insurance. After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place before hand
- You have sorted out funding for the contract deposit (traditionally 10% of the purchase price, but nowadays often less)
- You have agreed on a date of completion for the sale, which will be written into the contract
- You have read, understood and signed the contract
- Once you have done these things you will agree on a date and time to exchange contracts.
If you are buying a new home, you should arrange to have buildings insurance in place from the moment you exchange contracts. This is the point at which you legally become responsible for the property.
For more information on buildings insurance visit https://www.johnlewisfinance.com/insurance/home-insurance/buying-and-selling.html or any of the comparison websites such as www.comparethemarket.com or https://www.moneysavingexpert.com/
Exchange contracts – once the contracts are exchanged, the property is now officially yours! Time to celebrate!
Completion day
Completion day is the final step in the home buying process. It’s when property ownership transfers from the seller to the buyer. The buyer can collect their keys and move into their new home.
What happens on completion day?
On completion day, your conveyancing solicitor confirms the transaction, deals with paperwork and deeds, and (if you’re the seller) signs off mortgage completion statements.
Prior to completion the buyer’s conveyancing solicitor will check all mortgage conditions have been met and request the money from the lender.
The seller’s solicitors will request a Redemption Certificate (calculated to the day of completion) if there’s a mortgage on the seller’s property.
Conveyancing solicitors on each side create completion statements of all payments made and received and set out any invoices to be paid on completion.
On completion day both solicitors make final checks, and then the buyer’s solicitor will transfer the purchase money via the banking system to the seller.
Once the seller’s solicitor has received the funds, they’ll confirm completion with the buyer and release the keys from the estate agent. They also ensure any charges are paid, including the seller’s estate agent fees.
The buyer will be notified of the completion, and they can then move into the property.