The exchange of contracts and completion are typically the final two milestones in the property transaction. The exchange of contracts is the point where each party involved in the sale hands over and sign their copy of the agreement. Completion occurs when the money changes hands, and property ownership is transferred.
Depending on the individual circumstances, the time between exchange and completion can be anywhere from a few days to a couple of months. In this article, we’ll discuss the typical timeframes in which this process is completed and common complications and certain things you may not have considered before.
What is the difference between Exchange and Completion?
Your solicitor will work to draw up an exchange contract during the conveyancing process. This will outline the agreed price, date of sale and completion. It’ll also detail any particular conditions that have been put in place (e.g. the buyer needs to secure a mortgage by a specific date). Once both parties have signed this contract, it is legally binding; this is considered the contract ‘exchange.’
During this point in the transaction, if either party wants to depart from the sale of the property, they could face financial penalties. For this reason, it’s crucial to be sure you want to go ahead before exchanging contracts.
Completion is transferring money and ownership from the seller to the buyer. This stage usually occurs a few days after the contract has been exchanged but can take longer in some cases. The completion day is also typically when both parties will hand their keys to the estate agent and move into their respective properties.
How to agree on a completion date?
Your completion date will be agreed upon when you sign the contract. The day of completion is usually decided by all parties involved and their estate agents. It’s common for the completion date to be set a few days after the exchange to give both sides time to prepare for the move.
In some cases, the buyer may request an extended period between exchange and completion. This could be for several reasons, such as needing time to finalise their mortgage arrangements or waiting for a current tenancy to end. If the seller agrees to this, it’s essential to get written confirmation from your solicitor so that there’s no confusion later down the line.
It’s also worth noting that you can exchange and complete on the same day. While this isn’t particularly common, it can benefit all parties if the move is relatively straightforward. Within chain transactions, more time is needed to make final arrangements before completion.
What happens between exchange and completion?
A few key things need to happen between exchange and completion. Here’s a quick rundown of what you can expect:
- Your mortgage offer should be issued within ten days of exchange.
If you plan to purchase your property with a mortgage, your lender should issue the loan to your solicitor within ten days of exchange. This document will outline the amount you’ve been approved for and the terms and conditions of the loan.
- Your deposit will be transferred to the seller’s account on completion day.
Once your mortgage has been confirmed, your deposit (typically 10% of the property value) will be transferred to the seller’s account on completion day.
- You’ll need to arrange buildings and contents insurance.
It’s a legal requirement to have buildings insurance in place before completing your purchase. This is to protect your new home in case of fire, flooding or other damage.
What can cause delays between Exchange and Completion?
Several potential delays can occur between exchange and completion. The most frequent include:
Problems with the mortgage offer.
If your lender requests additional information or issues with your application, this can delay the process.
Delays in transferring funds.
If the buyer is purchasing a mortgage, their lender may take longer than expected to release the funds. This can cause delays on the completion day.
Problems with the property.
Suppose the buyer discovers any issues with the property during the period between exchange and completion (e.g. damp, mould or electrical faults). In that case, they may try to renegotiate the price or pull out of the sale altogether.
It’s not uncommon for a few hiccups in the lead up to completion. From problems with solicitors to last-minute changes in the chain, these can all cause delays.
While it’s not always possible to avoid delays altogether, there are a few things you can do to minimise the risk:
- Make sure you have all the necessary documents before exchanging contracts. This will help to speed up the process.
- Keep in close contact with your estate agent, solicitor and mortgage lender. This will help you to stay on top of any potential delays.
- Be prepared for the possibility of a delay. If you’re moving house, it’s always a good idea to have a contingency plan in place if your completion date is pushed back.
How long should I expect to wait between exchange and completion?
Depending on the circumstances of each property transaction, the time between exchange and completion will vary. Disruptions, delays or personal preference will play a role in the amount time you will have to wait.
Typically, you should expect two weeks between exchange and completion. However, simple exchanges could happen on the same day, and more complex may need up to 6 weeks or two months. Ensure you maintain consistent contact with your solicitor during the period to stay updated on the relevant changes to your case. This will help to reduce any stress that can occur while waiting for the completion of your purchase or sale.
There is no set time that you should wait between the exchange of contracts and your completion date. Whilst you will likely discuss your desired date during contract negotiations, further delays can push back your moving day. Working closely with a professional conveyancing solicitor will provide the security and peace of mind to make it to your completion dates.