Yorkshire Post - Property
Getting to grips with exchange and completion
Ellie Stothard from Switalskis Solicitors’ conveyancing department explains the commonly used terms “exchange” and “completion” in property transactions.
Exchange and completion are widely talked about throughout the property sale transaction by both your conveyancer and your estate agent – but what do these terms actually mean for both the seller and the buyer?
■ Exchange simply means exchange of contracts – it is the point at which both the seller and buyer legally bind themselves into the contract and agree to complete the transaction on the date specified in the contract. The buyer will have funds in place, the property survey will have taken place, the searches will have been carried out and you will have agreed everything that is included in the offer.
Completion dates are discussed ahead of exchange, but the date is not fixed until exchange has taken place.
■ Exchange as a seller: In order to proceed to exchange as quickly and efficiently as possible you will need to work with your conveyancer and provide replies to all the enquiries put to you by your conveyancer. The quicker the enquiries are satisfied, the quicker exchange and completion can be achieved.
If your property is currently mortgaged, make sure you have your mortgage account details ready as your conveyancer will need these details to be able to complete your mortgage redemption.
We recommend you start packing as early as you can, to ensure the process runs as smoothly as possible. Once enquiries have been answered the transaction tends to start moving very quickly. Make sure you are prepared and have a plan to pack your belongings and contact removal companies.
■ Exchange as a buyer: If you are planning to buy with a mortgage, make sure that you arrange your mortgage offer early on in the transaction. Your lender will have conditions that your conveyancer must abide by and there may also be instances where the lender’s approval is required to certain elements of the transaction. The more time you allow your conveyancer to comply with these conditions or seek the lender’s approval, the quicker the transaction can proceed.
If you are a first-time buyer, it is important that you inform your conveyancer if you will be purchasing with the aid of a Help to Buy ISA or Lifetime ISA so as not to delay matters at the end of the transaction.
Your conveyancer will often request deposit monies at short notice. Ensure at the beginning of the transaction that you have the deposit monies, legal fees and any monies needed to pay Stamp Duty Land Tax.
■ Completion: At completion the purchase monies are sent from the buyer’s solicitor to the seller’s solicitor and ownership passes from the seller to the buyer. In an ideal world, all buyers and sellers in the chain will complete on the same day, otherwise the buyer may need to wait until the sellers have completed buying their new home.
There is no set time for completion. It may be on the same day as exchange but is more likely to be a week or two later. The transaction completes as soon as the purchase monies are received by the seller’s conveyancer.
After completion, the buyer’s solicitor will submit the Stamp Duty Land Tax return and proceed to register the purchase at the Land Registry.
The seller’s solicitor will confirm to the buyer’s solicitor that the transaction is complete.