What exactly is exchange and completion?

calicocat

I am also just going through this process and now really confused. I thought you completed, as in signed to say you are purchasing, then exchanged at the end (not the other way round?)

My dads house is being sold (also trying to buy my own) and my step sister is saying they will complete on x day and exchange two weeks later?

RockPaperScissors

calicocat wrote: »

I am also just going through this process and now really confused. I thought you completed, as in signed to say you are purchasing, then exchanged at the end (not the other way round?)

My dads house is being sold (also trying to buy my own) and my step sister is saying they will complete on x day and exchange two weeks later?

No it's the other way.

You exchange contracts and then complete on them. (Hence the word 'complete') ;-)

MoneyMate

calicocat wrote: »

I am also just going through this process and now really confused. I thought you completed, as in signed to say you are purchasing, then exchanged at the end (not the other way round?)

My dads house is being sold (also trying to buy my own) and my step sister is saying they will complete on x day and exchange two weeks later?

It was a shock to me BUT please check, better safe than sorry :cool:

MoneyMate

monty-doggy wrote: »

Oh as in building and contents? Yes I'm doing that. Lol.

Are you sure your comments are correct if you are between Exchange and Completion ? :beer:

calicocat

RockPaperScissors wrote: »

No it's the other way.

You exchange contracts and then complete on them. (Hence the word 'complete') ;-)

Lol.....i did think it sounded a bit odd when she said it.

monty-doggy

MoneyMate wrote: »

Are you sure your comments are correct if you are between Exchange and Completion ? :beer:

What I mean is in renting at minute so have contents insurance, but I have buildings and contents lined up for new house, is that right?

calicocat

monty-doggy wrote: »

What I mean is in renting at minute so have contents insurance, but I have buildings and contents lined up for new house, is that right?

My understanding is yes, you are right, your mortgage won't be released without your insurance in place....which makes sense.

MoneyMate

dzug1 wrote: »

The process stalls when you don't exchange contracts because you can't commit to the sale

More information recently found,

As the Standard Conditions of Sales have not been amended, new property is at your risk from the date of the Contract. Although this does not specifically oblige you to insure the property, you are well advised to do so as you would be obliged to complete even if the property is reduced to a smoking ruin between exchange and the completion date.

Whilst you have no obligation to insure the property following exchange of Contracts again you would be well advised to keep your insurance in place as you cannot safely cancel your policy for the following reasons:-

1. It is all very well to state that the Buyer has an obligation to insure the property and you could take legal action against the Buyer to force them to complete the Contract if the property was destroyed but if the Buyer is relying on a mortgage provider to finance the purchase, it is likely that the Lender will refuse to release funds to purchase a property which is damaged and there is no provision made for repair. This could effectively leave you with no money and nowhere to live, as the house you are selling has been destroyed.

2. Even if we obtain evidence that the Buyer has insured the property, the policy may not be adequate, or even valid. There are many ways that an insurance policy can be voided i.e. what if the Buyer has not disclosed previous claims or convictions to his insurer. This could invalidate the policy and in turn again leave the property completely uninsured. :beer: