Buying or selling a home involves several important steps. Two key moments are exchange of contracts and completion. Understanding what happens at each stage can help you plan your move and know what to expect.
Written by Stephanie Chow, Solicitor
What happens before exchange?
Before contracts can be exchanged, the buyer’s conveyancer will usually complete the necessary anti-money laundering checks, review the title documents and search results, deal with enquiries, and report to the buyer. If the buyer is using a mortgage, the conveyancer will also check the mortgage arrangements.
Both parties need to agree the contract terms and a completion date. The buyer should make sure they understand the purchase, have their deposit ready and have arranged any necessary buildings insurance.
Until exchange, either party can usually withdraw from the transaction. An agreed offer by itself does not make the sale legally binding.
What does exchange of contracts mean?
At exchange, the conveyancers formally exchange the contracts signed by the buyer and seller. The agreement becomes legally binding, and the completion date is fixed. If either party fails to complete as required by the contract, this may amount to a breach of contract and have financial or other legal consequences.
The buyer will usually pay a deposit on exchange. The amount and arrangements can vary, so the buyer should confirm with their conveyancer how much is required and when it must be sent.
If you are buying and selling at the same time, the transactions may be linked in a chain. Your conveyancer will coordinate exchange with the other conveyancers so that the linked transactions can proceed together.
What happens between exchange and completion?
The time between exchange and completion varies. During this period, the buyer should:
- arrange removals and prepare for the move;
- send any remaining money needed for completion to their conveyancer in good time;
- check arrangements for collecting the keys; and
- confirm with their conveyancer whether buildings insurance needs to be in place from exchange.
The buyer’s conveyancer will request the mortgage funds, carry out any remaining pre-completion checks and prepare the completion arrangements. The seller should make arrangements to move out and ensure the property is ready to hand over in line with the contract.
What happens on completion day?
On the agreed completion date, the buyer’s conveyancer sends the purchase money to the seller’s conveyancer. Once the money has arrived and completion is confirmed, the estate agent can usually release the keys to the buyer.
The seller should leave the property by the time agreed, remove any belongings that are not included in the sale and hand over the keys as arranged. The seller’s conveyancer will use the sale proceeds to repay any mortgage secured against the property and account to the seller for the balance.
The exact timing can depend on the transaction and whether there is a chain, so it is sensible to avoid making assumptions about when the keys will be available.
What happens after completion?
After completion, the buyer’s conveyancer deals with the post completion requirement. These may include submitting a Stamp Duty Land Tax return in England or a Land Transaction Tax return in Wales, where applicable, and applying to HM Land Registry to register the buyer as the new owner and record the lender’s mortgage, if there is one.
How can you help the process run smoothly?
Keep in regular contact with your conveyancer, respond promptly to requests and send money only using the verified bank details provided by your conveyancer. If your circumstances change or you are unsure what to do before exchange or completion, contact your conveyancer as soon as possible.
Exchange and completion are important milestones, but the details can vary between transactions. Your conveyancer can explain what applies to your particular purchase or sale.
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