Exchange of Contract, what is this?

aviii

Hi,
i have been asked to give dates for Exchange of Contract?

I just want to make sure i understand.

Will the the Exchange of Contact date be the same as the Completion date?

or do i need to give two separate dates, one for the Exchange and one for Completion.

just to confirm - the completion date is the date i move in / own the house?

DanJKelly

Exchange of contracts is the day you sign contracts and from this day you are legally bound to buy the house. Once you have signed you need to start getting the money across to the solicitor.

Completion is the day you get the keys and you can move in.

Exchange and completion can be done on the same day but I think it is usually advised to leave a gap in between to allow money transfers etc

Hope this helps

andrewjb3

At some point you will physically sign a contract. That, in itself, means nothing..

At some point afterwards you will 'exchange contracts'. At the point everything becomes binding. You'll lose a deposit (or more) if you pull out. Similarly your buyer/seller can't pull out. You ought to arrange buildings insurance for the new property from this point.

At some point afterwards you complete. That's when the money moves from your mortgage company to the seller. And so on up and down the chain. You now own the property and can move in when you wish. [And have to move out if you've sold your existing hours]

Signing if often done 'whenever' as your solicitor just keeps the papers until they're needed.

A chain will generally all exchange at the same time. [Otherwise, for example, you're committing to purchase a new property but haven't got a committment for someone to buy yours, or vice-versa].

Completion can be any point after exchange. 1 minute later if you like. Typically a week or two to give people time to arrange final packing and removals. Longer if you want. Again, completion date needs to be the same for everyone (else someone will end up owning two or zero houses).

nicmyles

Assuming you're not in Scotland:

Exchange of contract is when contracts are exchanged and everyone is bound in contractually to the transaction and can no longer pull out without penalty. There will be a completion date specified in the contract, which needs to be agreed by you and your vendor (and anyone else in the chain). You will normally pay a deposit when contracts are exchanged.

Completion is when you give them the money and they give you the keys. The completion date is the date that was agreed when you exchanged contracts.

Sellers and buyers often propose exchange dates, but in reality the exchange happens when solicitors advise that everyone is ready to exchange. It's impossible to know in advance how long that will take and therefore any exchange date you or your vendor give can only be an estimate.

If everyone is ready, there is no benefit to delaying exchange for an arbitrary "exchange date". And if everyone isn't ready, you can't exchange!

I would suggest clarifying with your solicitor what date they are asking you for.

aviii

thanks for clearing that up everyone - i have a better understanding.
its now starting to set in that i am on my way to being a home owner

elverson

Useful info here

http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-do-i-exchange-contracts/

G_M

This is a huge amount of money you are spending. Ypu would be well advised to understand how it all works, and I don't just mean Exchange and Completion. There 101 other bits of the process that you should understand.

Try your local library for a free book like:

https://www.amazon.co.uk/How-Buy-House-Kirstie-Allsopp/dp/1444790633

https://www.amazon.co.uk/How-Your-First-Home-Sell/dp/0091935377