What is the Exchange of Contracts?
Published: 13th September 2017
Moving house is one of the most stressful things you can do in your life. The process is long, and there are many terms bandied around which can leave you confused and annoyed, while your property purchase is seemingly going nowhere.
One of the most stressful parts of the whole process is the Exchange of Contracts. This happens right at the end of the conveyancing transaction, and is the last point in which something can go wrong and the sale fall through. Therefore, this process is often fraught with tension.
Liddy’s Solicitors was founded on a dedication to client services above all things. We have aided thousands of conveyancing transactions in the Barnsley area, and further afield. That is why we wanted to write this small description of what to expect, so you can relax when it is your turn to exchange contracts.
The Exchange of Contracts is the point where the seller’s solicitor produces a document, or contract of sale which details the property, everything that is included in the sale, the date it will take place, the price and who exactly the buyer and seller are.
The buyer’s solicitor will then inspect the document. Once both parties are satisfied with the documents, and all the details of the sale, the buyer will arrange for a the transfer of the deposit in time for the exchange of contracts to take place.
Once this has been done both parties will sign the documents, and the solicitors will ensure that they are identical, often reading them out loud to the buyer and seller to ensure all the details are correct.
It is important to note that until the exchange of contracts has taken please neither party is obliged to follow through with the sale/purchase.
There are 4 thing which need to be in place before the exchange of contracts can take place. The buyer should:
- Have a mortgage valuation and any searches and surveys they require
- Have been offered a mortgage in writing
- Have arranged their deposit
- Have organised buildings insurance (as the buyer is liable for the property as soon as contracts are exchanged)
There is then normally a wait of 7-28 days from this exchange to completion.
As mentioned, this is the last stage in which issues can occur. Common issues include:
- The buyer or seller changes their mind and pulls out of the deal
- The seller increases the price or the buyer reduces their offer
- The seller gets a higher offer from someone else
- The searches carried out during the conveyancing process uncover a serious issue which needs to be taken into account
- The buyer has difficulty getting a mortgage
- You are in a property chain and a deal somewhere up or down the chain falls through, affecting your deal
If this process sounds complicated and tough… it can be. This is why it is imperative that you instruct a solicitor with experience to act on your behalf. The team at Liddy’s is lead by Mohammed Naheem Khalil, a conveyancing solicitor with over 15 years experience, and thousands of transactions behind him.
To find out more about our fixed fee conveyancing services just call us on 01924 366 896.