Completion date ... JARGON HELP please

KareenaMukherjee

Okay so got a letter from our solicitor saying we have a tentative completion date for the second week in July.

Now can someone break down some jargon for me? What happens on the completion date? My solicitor told me, you'll need the money arranged (although no word about my mortgage, i assume he'll take care of that?), but then informed me that completion, and the handing over of keys can be done a couple of weeks later when you're ready to move.

However, i then rang my estate agent, who told me that they were going to do the exchange and completion on the same day.

I seem to be lost in this mire of what is EXCHANGE AND COMPLETION.

What on earth happens ? I'm lost. I've emailed my solicitor to clarify but he normally takes a few days to reply back. In terms of moving this has come out of the blue, as up until now we were positive the owners would back out at some point as they were an emotional lot.

Anyways someone please go through the procedure with little old me .... when do i need to have my deposit ready? Does the solicitor get in touch with the bank for the mortgage? I'm lost!

jc808

KareenaMukherjee wrote: »

Does the solicitor get in touch with the bank for the mortgage? I'm lost!

Tell me youve got a mortgage.
Please tell me youve got a mortgage.

:eek::eek::eek::eek:

cjmumto2

LOL JC808. I to be honest dont understand completion and exchange but once you have exchanged there is no going back and you get the keys on completion once all monies are transferred.

So have you sorted your mortgage?

chris_m

"Exchange" is when the contracts between seller and buyer are exchanged - thereafter both sides are legally committed to the sale and canot pull out without incurring penalties.

"Completion" is when the sale is completed - the balance of the payment is made, the keys handed over and the buyer now owns the house (or their mortgage provider does).

It is usual for there to be a gap between the two, but it is equally possible if everything is in place (eg finance) for both stages to occur at the same time.

KareenaMukherjee

lol, YES have a mortgage in place, good grief people.

So do you pay the full deposit on exhange? Or just a small deposit?

G_M

Normally you pay 10% on Exchange, which as explained is when you contractually agree to the purchase.

The remaining 90% is paid at Completion, when ownership of the property actually changes hands.

It is possible (quite common) to agree a 5% deposit instead of 10%.

The date for Completion is written into the contract which is exchanged ..... at Exchange, so when your solicitor talks of a "tentative completion date " he is asking you if you are happy for this date to be put into the contract. Both sides have to agree the date.

timmyt

KareenaMukherjee wrote: »

Okay so got a letter from our solicitor saying we have a tentative completion date for the second week in July.

Now can someone break down some jargon for me? What happens on the completion date? My solicitor told me, you'll need the money arranged (although no word about my mortgage, i assume he'll take care of that?), but then informed me that completion, and the handing over of keys can be done a couple of weeks later when you're ready to move.

However, i then rang my estate agent, who told me that they were going to do the exchange and completion on the same day. great so you've not exchnaged

I seem to be lost in this mire of what is EXCHANGE AND COMPLETION.

What on earth happens ? I'm lost. I've emailed my solicitor to clarify but he normally takes a few days what, takes me max 30mins, usually instantly. did you go cheap and you dont have an actual 'solicitor' to reply back. In terms of moving this has come out of the blue, as up until now we were positive the owners would back out at some point as they were an emotional lot.

Anyways someone please go through the procedure with little old me .... when do i need to have my deposit ready? Does the solicitor get in touch with the bank for the mortgage? I'm lost!

not much else I can add to everyone elses comments

sonastin

Don't let the term "deposit" confuse you - it has 2 different meanings at this stage in the process:

First - the "deposit" that you've saved for the house purchase, with the balance of the purchase price being made up by the mortgage money.
Second - the "deposit" which your solicitor hands over to the vendor's solicitor on exchange of contracts, with the balance paid at completion.

As G_M said, it is usual to pay the vendor's 10% on exchange of contracts to signal your commitment to the purchase, although this can sometimes be negotiated to a lower figure. This will come from the cash that you are putting into the purchase, so you need to make sure that at least 10% (or whatever he tells you has been agreed) has cleared into your solicitors account before he can exchange contracts.

If, for example, you are putting down a 15% deposit (i.e. 85% mortgage) and there is a gap between exchange and completion, it would be possible to pay the extra 5% to the solicitor between exchange and completion but it is usually easier to give him all of your money in one transaction. Your solicitor might also want to see all of your deposit in his account before he commits you to the purchase for your own protection.