When Purchasing A Property What Happens At The Stages Of Exchange And Completion?

Buying a new property can be a nerve wracking time. After all, it is likely to be the single biggest purchase you have made to date and you will have undoubtedly spent a considerable amount of time saving up, planning your finances, researching the area in which you wish to buy, visiting different properties and, finally, setting your heart on the property which ticks all the boxes for your requirements. However, the road to exchange of contracts can often be a rocky one with delays from one part of the chain or another, people changing their minds or ‘pulling out’ of the chain, and people being gazumped along the way. It is often a huge relief to reach the stage of exchange of contracts, so what exactly happens at this point in the conveyancing process and how does exchange of contracts differ from the stage of completion?

Exchange of contracts is seen as a landmark stage in the conveyancing process as it is the time at which you enter into a binding agreement with the seller. You will sign a copy of the contract, as will the seller, and the contracts will then be exchanged. At this point the agreement is binding and you are likely to feel a huge sense of relief that your property purchase is set to go ahead. The contract will state a date upon which completion will take place and this will often, but not always, be two weeks from the date of exchange of contracts.

In between exchange of contracts and completion (or moving day!) you will of course be making arrangements with removal companies and packing up all of your belongings ready to transfer into your new home. Your solicitor will arrange to collect the funds from yourself and/or your mortgage lender to cover the cost of the property, legal fees, Stamp Duty Land Tax and Land Registry fees. Your solicitors will have final discussions with the seller’s solicitors, if necessary, to finalise any outstanding points. Your solicitor will also prepare the transfer deed and send it to the seller’s solicitor for signing.

When your moving day arrives (the day of ‘completion’) your solicitor will transfer the money for the purchase to the seller’s solicitor and you will take possession of the keys to your new property. Your solicitor will pay the Stamp Duty Land Tax from the money he holds on account and will also pay any other fees that remain outstanding. Your solicitor will register the interest of your mortgage company and you will become the new legal owner of the property. With the help of your removal company you will then be free to move into your new home!

Exchange and completion are two important stages in the conveyancing process and when these stages are reached the contract between the buyer and seller becomes binding and the transaction is concluded at completion.

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