Conveyancing - Sign up/Exchange/Completion

The_Palmist

I thought I have finally figured out the mystery behind exchange and completion when my solicitor emailed today saying she is looking to arrange a date so I can visit her and sign up.

I asked if she means exchange but she says "No, the signing just gets me ready to exchange, exchange of contracts is done over the telephone with all the chain by the solicitors."

Is this the standard ?

Does anybody knows if I will paying something in this "signing" ?

I will be seeing her soon to clarify these and wondering if anyone else has anything to advise on the above.

sonastin

Basically...
at "sign up" (as you call it) your solicitor is asking you to give her everything she needs to carry out your transaction. So you'll go through the contract with her and when you're happy to proceed, you sign the contract so it is ready to go. You'll need to arrange to get your deposit to her as well - in time for exchange so not necessarily on that day. The mechanics of paying your deposit depends where the money is and how much of a rush you're in.

Once your solicitor has everything from you, i.e. your deposit, confirmation that your mortgage is good to go, confirmation from you that you are ready to proceed with the transaction and an agreed completion date, she can "exchange" contracts with the vendor. This is usually done over the phone. At this point you're committed which is why your solicitor needs everything ready before she commits you to the purchase.

Completion is when the purchase actually takes place - your solicitor will draw down your mortgage funds and hand them over to the vendor's solicitor along with any extra deposit money from you. (Usually 10% is paid on exchange so if you're putting in a 20% deposit, the other 10% will get paid on completion). The estate agent is informed that the transaction has taken place and they can release the keys to you. Then its your property.

The_Palmist

Thanks for the insight. I also need to give 4 weeks notice to my letting agent. Do solicitors normally confirm with the vendors that they are also definitely committed before signing buyers. I know that there was some access rights issue with the house my vendors were looking to buy and this would be a cause for delays. I will be ringing them to make sure that's sorted and there is no further delay from their side before I part with any money.

sonastin

Exchange can only happen when your solicitor is ready to commit you to buy, and the vendors solicitor is ready to commit them to selling. If they MUST have their purchase ready to move into before they can move out of their current house (i.e. a proper definite chain), the vendors solicitor will only agree to exchange with your solicitor when their vendor's solicitor has confirmed that their vendors are ready for exchange too.

As I understand it, your solicitor calls them and asks if they are ready, and agrees that exchange will happen that day. The vendors solicitor then speaks to their vendor and has the same conversation. The vendor's vendor's sol then speaks to their vendors sol... etc all the way to the top of the chain. At the top of the chain, exchange happens and then the exchange cascades all the way down to your vendors solicitor calling your solicitor back and exchanging contracts with your solicitor. Or something like that. I'm not too sure how /when the deposits get passed up the chain - maybe I've run it back to front and it goes from the top down and back up!

The alternative is your vendors are prepared to move out and are happy to sell to you even if their purchase is held up. Then you can exchange as soon as you and the vendors are ready and have an agreed date for completion.

G_M

Do not think of this 'sign up' as in any way commiting you. That happens at Exchange (which the solicitors do by phone with each other, without you). You can ring your solicitor at any time before Exchange and tell them not to proceed, just as the vendor can as well.

The 'sign up' is to ensure you've signed all the documents ready for your solicitor to Exchange, and for your solicitor to make sure you understand everything, have all finance in place etc.

Do NOT give notice on your rental home till Exchange, as any number of things could delay it, or even cancel it.

Yes, your solicitor will phone you before Exchanging to check you are still happy to proceed, but doubtless he'll explain that when you go in to 'sign up'.