Exchange and completion: What’s the difference?
If you’ve reached the homestretch of your sale, exchange and completion will be your final two hurdles.
Let’s take a look at the difference between the two, what to expect at each stage, and the key things you’ll need to bear in mind.
What is the difference?
While exchange and completion are essentially the final phases of a property sale, they are separate from one another:
- At the point of exchange, the property sale becomes legally binding.
- At completion, the buyer becomes the legal owner of the new home and is free to move in.
What happens before exchange of contracts?
Most of the legwork involved in your sale will be completed before the point of exchange of contracts. Your conveyancing solicitor and estate agent will have been working hard behind the scenes to get you to this stage!
At this stage, the buyer can still try to renegotiate the price, especially if the survey has flagged up any issues with the property. However, the purchase price cannot be altered once the contracts are exchanged.
Both parties also have the option to back out altogether before contracts are exchanged, so this is a pinnacle point in the sale. However, it’s impossible to back out at this stage without financial loss.
What happens when you exchange contracts?
Both party’s solicitors will confirm by telephone that they have signed copies of the contracts and the buyer’s solicitor will confirm that they have the deposit.
They will also confirm the date in which the sale will be completed. If you’re in a property chain, exchange of contracts will begin at the bottom of the chain all the way up to the top, which should all happen on the same day.
What does completion mean?
Completion is the final stage of the home sale, which marks the day that the home legally belongs to the buyer.
Upon completion, the deposit will be transferred to the seller’s solicitor, who will then need to confirm that they have received it before the sale can be finalised.
Once this has been confirmed, the ownership of the property must be transferred over to the buyer through the Land Registry. The seller then has until 1pm to vacate the property. After this point, the buyer can pick up the keys from their agent and move into the home.
What happens after completion?
After completion, the buyer will need to pay for Stamp Duty, and this will be handled by their solicitor once the money is transferred over to them.
If everything has gone smoothly up until this point, the buyer can unpack and get settled into their new home!
Are you planning on moving this year? Make sure you have an expert on your side.
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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