The local searches have been completed, and your offer has been accepted – congratulations! The only thing left to do now is exchange contracts. This typically takes one to four weeks before completion, but it may vary.
Explore our guide to learn about what the process entails and what happens after completion. We’ll also answer some frequently asked questions to help you along the way.
Key Takeaways
Exchanging Contracts: Both the buyer and the solicitor sign identical contracts, which are then sent to each other’s solicitors by recorded delivery. At this point, the deal becomes legally binding, and no one can back out.
Completion Date: Usually, there’s a two-week period between exchanging contracts and completion. However, this timeline can vary. Use this time to finalize your move arrangements.
What can delay exchanging contracts?
- Mortgage Offer: You need a formal mortgage offer from a provider before exchanging contracts.
- Valuation Differences: If the property valuation is lower than the agreed price, it can affect the process.
- Search Delays: Searches (e.g., Local Authority, Environmental) take time and may reveal unexpected issues.
- Chain Length: The process depends on the seller finding their next property.
What does exchanging contracts mean?
When you exchange contracts, you're legally bound to purchase the home. Your solicitor and the seller's solicitor will swap the signed contracts, and neither party can back out without potentially facing financial penalties. Once the contracts have been signed, you and the seller can agree on a completion date.
How much does it cost to exchange contracts?
When exchanging contracts, you'll need to pay an exchange deposit. This is usually 10% of the property's price, but it might only be 5%.
When are contracts exchanged?
You're ready to sign the contract once:
• All local searches have been completed
• Your mortgage lender has conducted a valuation of your property
• You've conducted a home survey
• You've received a mortgage offer in writing
• You've arranged your deposit
• You've agreed on a completion date
• You've checked the contract and asked all relevant questions
• You've organised buildings insurance
What should I expect when exchanging contracts?
The process of exchanging contracts is handled by your solicitor and the seller's solicitor. They will:
• Read both party's versions of the contract over a recorded phone call
• Post their version to one another
• Send a copy to you
What might hold up the exchange of contracts?
Several factors might delay how quickly you can exchange contracts, including the following:
1. Waiting to receive a mortgage offer
You may have already received a mortgage in principle (MIP), but you can only exchange contracts after you have a formal mortgage offer. If there are any problems with your application, it may take longer before you exchange contracts.
2. A difference in valuations
Your mortgage provider will value your property to ensure it’s worth what you’re paying for it. If this is lower than the price you’ve agreed to pay, they may only lend if you buy the home at the lower price. Unforeseen issues like this can lengthen the time it takes to exchange contracts.
3. Delays in conducting searches
When you’ve agreed to buy a property, your solicitor will carry out searches such as Local Authority, Environmental, Water Authority, Chanel Repair and Location-Specific. These can take up to six weeks.
4. The size of the chain
The exchange of contracts could be delayed until the seller finds their next property. Once they do, they’ll set a completion date, but this needs to consider other people further up the chain.
What happens after exchanging contracts?
Once the contracts have been exchanged, moving day is almost here. You can start updating your details, redirecting your post and booking a removal company. If you only have a few items to move, you may want to hire a van to save money.
You should receive confirmation from your solicitor that you're the registered owner of the property, according to HM Land Registry.
What should I do once the contracts have been exchanged?
There are a few things you can do between exchanging contracts and completion. These include:
• Insuring your new property as soon as you’ve exchanged
• Sending a copy of the title deeds to your mortgage lender
• Registering the transfer of ownership with the Land Registry
• Contacting your banks and utility companies to inform them of your purchase
Looking for your new home? Explore our brand-new properties across the UK and discover homebuying offers to help you move.
Call or visit our Sales Advisers at your preferred location and become a homeowner with David Wilson Homes.
FAQs
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Your solicitor should inform you when the contracts are exchanged. They should also record the conversation that they have with the other party’s solicitor.
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No, because the completion date must be written into the contracts before they can be exchanged.
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Once you have exchanged contracts, you are legally obliged to complete the purchase. If you decide to pull out, you may incur penalties, including losing your deposit.
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Your mortgage and deposit have been transferred to the seller, and you will officially receive the keys to move in.
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