When it comes to buying and selling property, the process can be full of confusing terminology. There are various different stages to tackle and hoops to jump through. It can be pretty stressful, particularly for first-time buyers. However, getting your head around some of the main parts can help you to feel more confident and prepared.
Two of the biggest and most important steps in buying a house are exchange and completion. But what do they mean? What’s involved? Can the deal collapse even after exchange?
This post explores everything about understanding the difference between exchange and completion. We’ll cover what they mean, what happens on exchange day, and how long it can take between exchange and completion.
Defining exchange and completion
Before we get into the difference between exchange and completion, let’s take a look at what each is:
- Exchange: the exchange is the beginning of the end of a property purchase and when the formal agreement takes place. It’s when the buyer and seller swap and sign their respective contracts and agree on a completion date. The buyer will also pay the deposit at this point.
- Completion: the day the legal ownership of the property transfers from seller to buyer. The buyer pays the remaining balance on the purchase and receives the keys. At this point, the sale is completed.
What are the key differences between exchange and completion?
Before exchanging contracts, either side can pause or cancel the deal. However, when the contracts are exchanged and signed, both parties have entered into a legal agreement to complete the transaction for the agreed price on the specified date. If either side pulls out of the deal after this, there will be financial and legal consequences.
If the buyer pulls out, they’ll lose their deposit and may also have to pay the seller’s fees. If the seller pulls out, the buyer can serve a Notice to Complete. This gives the seller 10 days to complete the deal while also paying daily interest to the buyer. If they still don’t complete, they’ll be in breach of contract. They’ll have to repay the deposit as well as cover the buyer’s costs.
How long is there between exchange and completion?
If you’re wondering how long it takes from signing contracts to completion in the UK, there isn’t a specific timeframe. However, it generally takes anywhere between one and two weeks, depending on what both parties agree. This gap allows everyone to plan their moves and make sure they’re ready for the big day.
We sometimes get asked if you can exchange and complete on the same day. Although uncommon it can be done, but usually, it only works for cash buyers with no chain.
What time of day does the exchange of contracts happen?
Most exchanges happen between 10 am and noon as this allows plenty of time for solicitors on both sides to complete the process and the mortgage lender to release the funds.
Although exchanges can happen on any working day, most take place on Mondays, Tuesdays or Wednesdays to allow time for any unexpected delays.
How to ensure a smooth exchange of contracts
Exchanging contracts is usually a fairly simple process, but it can still be stressful and things can go wrong. Understanding what happens on exchange day can help you keep calm and do everything you need to.
On the big day, each party’s solicitor will exchange the contract you’ve already signed, so make sure you do so and get it to them in advance. You don’t need to be there and your solicitor will let you know when it’s done, but you can help it run smoothly by:
- Being available and responsive so your solicitor can get hold of you if they need to
- Ensuring the deposit money is ready to go
- Having your documentation ready
- Keeping solicitors updated about the chain
- Being flexible with completion dates and pre-completion searches
- Proactively working with your mortgage provider to make sure the completion funds will be available when needed
Buying a house can be very stressful. In 2022, a survey by Legal & General found that 57% of Brits consider it the most stressful life event, ahead of having a child and getting a divorce. That said, exchanging and completing doesn’t have to be as long as you plan and work with your solicitors to get it done smoothly.
However, there is another way. If you want to sell your home quickly, Zapperty will make a cash offer on any property within seven days of you contacting us. We’ll take away the stress and the hassle of the transaction with no agency costs or solicitor fees, no work required on your side and a quick deal guaranteed. Contact us today to find out more.