When buying or selling a property, one of the most important stages in the process is the exchange of contracts and completion. These two steps are crucial in ensuring that both parties fulfill their obligations and the transaction goes through as smoothly as possible. In this article, we will explore the ins and outs of exchanging contracts and completing, so you can be prepared when the time comes.
Exchange of Contracts
The exchange of contracts is the point at which both the buyer and seller become legally bound to complete the transaction. Before the exchange of contracts, either party can pull out of the deal without facing any legal consequences. However, once both parties have signed the contract and exchanged them, the transaction becomes legally binding.
It`s important to note that at the point of exchange, the buyer will typically need to pay a deposit, typically 10% of the purchase price, to the seller. This deposit is non-refundable and ensures that the buyer is committed to the purchase.
The exchange of contracts typically takes place after both parties have agreed to the terms of the contract, and the buyer has obtained any necessary financing or other approvals. The exchange can take place in person or by post, and both parties should receive a copy of the signed contract.
Completion
Completion is the point at which the buyer pays the remaining balance of the purchase price, and the seller hands over the keys to the property. This typically takes place a few weeks after the exchange of contracts, but the exact date will be agreed upon by both parties in advance.
On the day of completion, the buyer`s solicitor will transfer the remaining balance of the purchase price to the seller`s solicitor. Once the funds have cleared, the seller`s solicitor will confirm to the buyer`s solicitor that completion has taken place, and the keys to the property will be handed over to the buyer.
It is important to note that completion can be delayed if there are any issues that arise during the process, such as issues with financing or legal complications. It is always best to be prepared for any potential delays and to have a contingency plan in place to ensure a smooth completion process.
In conclusion, the exchange of contracts and completion are two crucial steps in the process of buying or selling a property. It is important to understand the timelines and requirements for each step to ensure a smooth and successful transaction. By being prepared and working with experienced professionals, you can navigate these processes with confidence and achieve a successful outcome.