What Happens during Exchange and Completion When Buying or Selling a Property?

Portrait of young couple feeling happy about buying a new house.

“Completion” and “exchange” are two terms used by conveyancers and estate agents throughout a property transaction, but if you’re new to the property market, it can be difficult to know precisely what they mean.

Whether you’re a first-time buyer or you’re just a bit hazy about what happens between exchange and completion, we’ve answered all of your questions in this article.

What Is Exchange of Contracts?

Exchange of contracts is the day when the sale contract for the purchase of the property is dated and becomes legally binding for both the buyer and seller. It’s known as the day of completion.

At this point, buyers will typically pay a 10% deposit of the total purchase price of the property (bank transfers to the conveyancing solicitor are the most common method of paying deposit funds). A completion date will also be set and agreed upon by both the seller and buyer. All the parties involved in the sale will be legally bound to complete the transaction.

Any party attempting to back out of the transaction after the exchange of contracts will face contractual penalties, such as losing their deposit or owing the other party money in damages.

What Happens on the Day of Exchange of Contracts?

On the day of exchange, the buyer’s conveyancer will telephone the seller’s solicitor, and usually, the exchange of contracts will take place by telephone.

You don’t need to come into the office — you might have signed the contract before the exchange date or given your solicitor authorisation to proceed either by email or telephone. Your conveyancer will exchange contracts on your behalf.

Do You Need to Sign the Sale Contract?

Exchange can only take place once your conveyancer holds your signed contract. That’s why we often ask our customers to sign the contract early — to avoid any last-minute rushing.

You’ll be sent the contract to sign in your own time and return to us by post. Then, we’ll hold your signed contract until the exchange date. No matter when you sign, exchanging contracts only happens when your conveyancer takes the legal steps to do so.

When Will Exchange of Contracts Take Place?

Exchange of contracts will usually take place very close to your completion date. This is because once you have exchanged contracts if the seller or buyer fails to complete on the set completion date, they will be liable for financial penalties.

So to protect you from hefty, additional costs, your conveyancer will only exchange contracts when they’re satisfied that everything is in place for completion.

Ordinarily, this means the following have been confirmed:

  • If you are buying with a mortgage, you have your building’s insurance in place.
  • Your mortgage lender has confirmed that they will release the mortgage funds in time for the date of completion.
  • Any land registry searches have been carried out, and the results are satisfactory.
  • You have provided your exchange deposit if you are buying.
  • You have confirmed to your solicitor that you are happy for the exchange of contracts to take place.
  • All other parts of the property sale have been completed; namely, the searches have been received, mortgage offer issued and checked, signed documents received, replies to enquiries received from the sellers and all ID and source-of-funds documents are in order.
  • If you are selling, your buyer’s solicitors will only exchange contracts once the items listed above are acceptable.

How Long Does It Take to Exchange Contracts on the Day?

By the time you’re ready to have your contracts exchanged, everything will be in order, not just for the exchange of contracts but for the completion of the sale. You’ll already have signed your contract, or you’ll be asked to give telephone or email authorisation before the exchange, so the actual process of exchanging is fairly quick.

Usually, it’s a straightforward phone call between the buyer’s solicitor and the seller’s conveyancer.

How Long Does It Take To Complete After Exchange of Contracts?

There does not have to be a minimum time between the day of exchange and the day of completion. As a rough guide, the exchange of contracts generally takes place between 7 and 28 days before completion. A week or two after the exchange is the most common timeframe.

However, there can be long delays between exchange and completion if buyers or sellers are part of a chain.

Is It Possible to Exchange and Complete on the Same Day?

Exchange and completion can happen on the same day! However, this doesn’t happen very often. It can be quite stressful as it requires a lot of work in a single day — for sellers, buyers and both parties’ solicitors.

Mortgage funds need to be arranged, so both parties need to organise moving in/out and maybe book time off work. But when exchange and completion happen on the same day, there is little certainty and not much time to make arrangements.

There is also more that can go wrong when you exchange and complete on the same day. For everything to run smoothly, you need paperwork to be completed on time and funds to be transferred without delay. Most mortgage lenders will have a minimum period for arranging for property funds to be transferred, e.g. seven days.

Therefore, it’s not often that exchange and completion happen simultaneously. For a stress-free house sale, we always recommend completing at the earliest a week after exchanging.

What Happens on Your Date of Completion?

On completion day, the unpaid purchase price is settled by the buyer — either with cash if they’re a cash buyer or with further deposit funds and mortgage funds.

Whether you’re using a local or an online solicitor, buyers and sellers do not have to visit their solicitors on the day of completion, which is good because most buyers and sellers will be busy packing and moving into their new homes!

Sellers will usually have moved out and given their keys to their estate agent ahead of the completion day. But if not, they will need to do so by a specific time. Buyers will then be free to pick up the keys from the estate agent.

Completion Day Explained for Sellers

The completion date is the day the property is no longer yours legally. It’s an agreed date in your contract when you receive the full purchase price, less any deposit paid. Practically, this is the date you’ll hand over the house keys and move out.

On the day of completion, the buyer’s solicitor will send the unpaid purchase price to your conveyancer, and once it is received in their account, completion is said to have taken place. This means that the property has now been transferred to the buyer. You can then arrange to give the keys directly to the buyer or notify the estate agent to provide the keys to the buyer.

Completion Day Explained for Buyers

The date of completion is the day the property legally becomes yours. It’s an agreed date in your contract when you pay the full purchase price, less any deposit paid. Practically, this is the date you’ll receive the house keys and move in.

Your conveyancer will send your deposit money and mortgage funds (if you are using a mortgage) to the seller’s conveyancer. Once the seller’s solicitor receives this, they will notify the seller and estate agent. The keys to the property can then be given to you.

Can Completion Take Place over the Weekend?

While it might seem like completing on a weekend is more convenient, it’s unfortunately not possible.

Completion can only take place on a weekday because the banks and both the buyer’s and seller’s solicitors must participate in the process. Any weekday, save for bank holidays, can be set for completion.

Some weekdays may not be appropriate for completion in the run-up to Christmas as some banks and solicitor firms have shorter working times. Your solicitor will discuss the best date of completion for your circumstances.

What Time Does Completion Take Place?

There is no fixed time when completion will occur on your completion date. Completion happens when the purchase money arrives in the seller’s conveyancer’s bank account, and the seller advises the agent/buyer that monies have been received. This could happen early in the morning, noon or later in the day before 5 pm, depending on when the buyer’s conveyancer sends the funds and how long the bank transfer takes to process.

Typically, completion will take place by mid-afternoon. However, if it takes longer, your conveyancer at Lockings Solicitors will be on hand to provide you with professional advice.

When Should Completion Dates Be Agreed?

Once your conveyancing solicitor has all the information they need regarding your sale or purchase, they will contact you to discuss completion dates. We recommend not agreeing on a date until your conveyancer contacts you to discuss them.

Once a completion date is agreed upon, both parties can book their removals and arrange to move with certainty.

Top Tips for a Smooth Exchange and Completion Process, from Our Conveyancing Solicitors

At Lockings Solicitors, we help sellers and buyers navigate the exchange and completion process. Here are our top tips for avoiding moving anxiety and making your house sale as stress-free as possible.

  • Don’t believe everything you hear: If you’re told that a party in the chain is ready, don’t believe it until we confirm their position. People often say they are ready to exchange when they aren’t.
  • Hold off on making arrangements: Don’t book removal companies or make other firm commitments until you know from us that everyone in the chain is ready and can agree on the completion date.
  • Allow for a sensible gap between exchange and completion: Leave at least seven days and preferably 14 between exchange and completion. This way, you can make arrangements knowing (not just hoping) that the move will go ahead on the agreed date. It also helps us make final arrangements, such as obtaining funds from your mortgage company. Most lenders need about seven days’ notice to release funds, and the money has to be used for the purchase immediately. Some mortgage lenders may charge up to £100 if the money is sent back and then re-requested — which can be avoided if there is a gap between the exchange of contracts and completion.
  • Try to be flexible at the start of your property purchase: Don’t start thinking about completion dates straight away, as it’s impossible at the outset to predict how quickly things will happen.
  • Avoid giving your seller or buyer a completion date before exchange: If your seller or buyer asks for a date before everyone is ready, be as vague as possible. If you can’t be sure, there’s no point in fixing a date that may turn out to be impossible to achieve.

Choose Lockings Solicitors for More Speed, Less Stress Conveyancing

Lockings Solicitors help make your move as hassle-free as possible. We deliver nationwide conveyancing services to provide the legal advice you need, wherever you are. We’ll help you purchase or sell your property with confidence, knowing that you’ve got excellent legal representatives on your side.

For a no-obligation conveyancing quote, get in touch with our friendly office team today. We’ll make sure you speak to the best expert from our team.

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