My estate agent keeps talking about exchange and completion – what’s the difference and when will I get my hands on the keys to my new place!?
Well, the contract is the document through which you will be purchasing your new property. The ‘exchange of contracts’ happens before completion and this is when all parties are contractually bound to the transaction. Your rights and obligations in respect of the contract should be explained to you by your solicitor and you will be asked to sign the document once it is in an agreed form. A deposit is usually paid on exchange and this is often 10% of the purchase price. The ‘exchange’ itself is done between the solicitors over the telephone and only happens once all investigations and searches have been completed, and any enquiries raised about the property satisfied.
The ‘completion’ date is fixed upon exchange. Between exchange and completion your solicitor will be dealing with the Land Registry Transfer document to register you as the new proprietor along with any documentation required by your mortgage lender if you have one. You will need to ensure all financial arrangements are finalised before completion can take place as the solicitor will need to have the balance payable in order to complete.
The day of completion is when the monies are actually paid over to the seller’s solicitor, you do not usually need to be present as funds are transferred electronically through the banking system. Once completion has taken place you should receive a telephone call from you solicitor with the exciting news that you can finally get your hands on the keys to your new house!
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