What Does Exchange of Contracts Mean?
When exchange of contracts takes place the matter is legally binding on the seller and the buyer. Up until exchange of contracts any party can withdraw from the transaction. It’s important when making or accepting an offer on a property you are aware of the formalities and the risk a party could withdraw leaving you out of pocket and unsure how to proceed.
Exchange of contracts can only take place once the legal formalities have been completed and all parties are in agreement with the proposed completion date.
When choosing a Conveyancing Solicitor it’s important to discuss your timeframes and any deadlines you may have. You want to move to exchange of contracts as soon as possible to reduce the risk of a party withdrawing.
If you are involved in a chain of property transactions the risk of a withdrawal may not be in relation to your sale or purchase, it could be above or below you in the chain. It’s therefore critical you choose the right Conveyancing Solicitor to support you through the process.
If you are buying a home your Conveyancing Solicitor will be required to review the title and confirm to your lender it is ‘good and marketable’. Whilst the title may be ‘good and marketable’ it may not be suitable for your needs, your Conveyancing Solicitor will report to you on the property and seek your further instructions once all replies to enquiries have been received.
If you are selling a home your Conveyancing Solicitor will be required to issue contract documentation to your buyer’s Solicitor as soon as possible to enable them to submit property searches and raise any enquiries on the paperwork.
Once all parties are happy to proceed you will be asked for a proposed completion date. Completion is when you get the keys and can physically move into your new home. Contracts are not exchanged until all parties negotiate and agree a moving date. If you are buying a property you will receive your detailed Conveyancing report from your Solicitor and also be asked for your deposit.
Your Conveyancing Solicitor will complete final checks and telephone other Solicitors directly involved in the chain to confirm they are in a position to exchange and agree the completion date.
If there is a chain the first buyer’s Conveyancing Solicitor will contact the next person in the chain, confirm the purchase price, deposit, any special conditions and the completion date. They will ask for a release of the contract enabling the next person in the chain to follow the same process until the top of the chain is reached.
Details will be confirmed and the exchange time agreed at the top of the chain. The top of the chain will then confirm exchange and move through the parties to the bottom of the chain which will complete the exchange process.
How Long to Exchange Contracts?
Depending on the extent of the property chain, exchange of contracts can take a full day. Once exchange of contracts has taken place your Conveyancing Solicitor will confirm the legal completion date and the matter is now legally binding on all parties.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Billingham, Bristol, Cardiff, Catterick, Lancaster, Leeds, Liverpool, London and Manchester.