When buying a property in England or Wales, two of the most important terms to get to grips with are ‘exchange’ and ‘completion’. Only once you’ve done both of these will you be able to get your hands on the keys to your new home. Here’s what you need to know.
When you exchange contracts, this means you are now legally bound to buy the property you have made an offer on.
Exchange should only take place after your solicitor has gathered together all the necessary information they need for the sale to proceed. This includes local searches on any planning matters which could affect the property, details of the lease if there is one, survey findings, and a fixtures and fittings form from the seller showing what they will be leaving in the property and what they will be taking with them.
The contract will also include the selling price, your mortgage offer, and the date on which you will take possession of the property. Prior to exchange, either you or the seller can pull out of the deal at any time. The actual process of exchanging contracts will be done by your solicitor and the seller’s solicitor.
When you complete your property purchase, it is at this point you essentially fulfil the terms of the contract that you have exchanged.
That means the property deeds transferring ownership to you must be provided, and the funds you are using to buy the property must be transferred to the seller.
Completion typically takes place about a fortnight after contracts have been exchanged, but sometimes it can take longer or be arranged more quickly if both parties want it to. However, it’s often a good idea to have a bit of a gap between exchange and completion to give you time to make your removal plans.
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Explaining the terms - completion and exchange