Period between exchange of contract and completion

englandcrew

Hi,

I have asked many questions on this forum but need to keep starting a new thread for each, so i apologise in advance!

Can somebody help me understand some things regarding exchange of contracts and completion.

Is exchange of contracts when you sign the contracts and the house sale/purchase is legally binding? I guess the completion is the sending of money to accounts and handover of keys.

If this is correct what is the general time frame between exchange and completion. Can this vary?

I ask because I am a first time buyer and the occupants of the house we are trying to buy will be moving out of the county, they have not looked at properties and will have no where to go if they sell their house. What happens if they dont find somewhere? Can they delay completion to find somewhere?

Thanks in advance!

Marcy_Marc

Hello,

Yes, exchange of contracts is when the dates set are legally binding and should anyone of the parties involved pull out, there will be financial penalites.

Completion is the date the purchase monies are transferred over to the vendors solicitors and upon receipt they will allow the release of the keys at the estate agents.
The period between exchange and completion can vary, it can be simultaneous or it can be on a long stop date or earlier by arrangement. However it is usually around a week.

It is sometimes known for sellers who have no onward purchase / have a longer period before completion on an onward to move into temp accommodation. However this will depend how nice the vendors are!

englandcrew

Thanks for the reply. As first time buyers we are in no rush to move in, could we as an incentive offer to allow say 3 months between exchange of contract and completion?

How about exchange of contracts, could the sellers delay this part whilst they are looking at properties?

Yorkie1

I would caution against such a long period between exchange and completion.

There is a potential risk that the property may change in condition between the two dates - and depending on which version of the contract is used, you may bear the risk of rectifying such issues.

The main issue, though, relates to the mortgage. A mortgage offer only lasts for a certain period of time. You run the risk of it expiring before the completion date. There is also the relatively low risk of something coming up as far as the lender is concerned in the interim period, leading them to withdraw the mortgage offer.

I do not know if searches would expire, needing to be redone.

Go with your solicitor's advice and let the sellers sort out their own predicament, if they do feel it is a predicament.

Edit: yes, you can agree to delay exchange for a short while if you wish, for the sellers to take a bit more time to find somewhere. But you will need to consider a) the expiry of mortgage offer &/or searches, and b) how long you are prepared to wait anyway. I wouldn't let the sellers take as long as they want or you'll end up being taken for granted. Set a mental limit on it and ensure it's communicated to them via solicitors.

Marcy_Marc

IMO it's down to what you want at the end of the day.

If you're happy with the property and the price, I'd want it exchanging to ensure that the property is legally yours.
However I wouldn't want to leave a long period between exchange and completion because anything could happen to the property.

There would normally be a long stop date for completion if say for instance there was some work being carried out prior to you moving in.

The attitude of some is that they want it exchanged and completed as soon as possible and they don't really care what comes of the vendors - not their issue, is it?

englandcrew

Again thanks for the replies.

From both your posts I am not liking the idea of a long period between exchange and contract.

I cant help but wonder if the seller is really serious about selling having not even been looking for somewhere to live, I dont want them mucking us around because they cant find somewhere!

This house buying busy is not easy :eek: