Buying a home
Exchange and completion
By Joe Elvin
Article 13 of 13
Exchange and completion
It’s exciting to have an offer on a property accepted. But until you've exchanged contracts, nothing is guaranteed. Find out what's involved in exchanging and completing on your new home.
Exchanging contracts and getting to completion on a property can be a hard slog, especially if you have to sell your own property first. Nevertheless, there are things you can do to make the process less painful.
In this guide, we'll explain:
- Step-by-step process to exchanging contracts
- How to set a date for completion
- What happens on reaching completion
- Making your next move easier
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Exchange of contracts is when the two legal firms representing the buyer and seller swap signed contracts, and the buyer pays a deposit.
At this point, an agreement to buy or sell a property becomes legally binding - once everyone in the chain has exchanged, no one can back out of the deal.
Before you exchange contracts, each of the following agreements need to be in place:
- You'll need to have a written mortgage offer
- Contracts for sale and purchase must be drawn up and a completion date must be agreed
- Your conveyancer should have lodged an interest in the property, enabling you to pay the seller and apply to the Land Registry to transfer the deeds to your name
House survey results:
- An agreement to undertake any actions or negotiations based on house survey findings must be in place
- The property information form and fixtures and fittings form must be filled in
- Your conveyancer should have completed local searches to check for any planning or environmental issues
- If you're buying a leasehold property, you'll need any key information about the lease, such as special clauses prohibiting pets and subletting
- Once exchange has occurred, you become responsible for insuring the property, so you'll need to arrange for buildings insurance in advance and pass the policy number to your legal firm.
- It is worth asking the vendor who currently provides their policy, as you may want to continue with that insurer. This is a particularly good idea if the property is in a flood-risk area or has subsidence problems, as the insurer will already have details on the building and associated risks
Find out more: Home insurance reviews – see which companies are rated best by customers
Setting a date for completion
When you exchange contracts, you should set a completion date. A legal firm can be sued if they fail to meet that date, so they have a strong incentive to meet the deadline.
How long is there between exchange and completion?
Completion dates are typically set two weeks after exchange, but this is just a guideline. If no one in the chain is in a hurry to move, you can ask for more time.
Four weeks or more means you have more time to organise a removals company, pack your belongings, arrange any essential works for your home and change your address information.
What should you consider before setting a completion date?
The first few days after you move into your new property are an ideal time to make superficial changes - take down decorations you don’t like, put up new curtains, and clean everything to your own standards.
If you are able to arrange a couple of days between completion and moving in (maybe with your belongings in storage), you can get a lot done in an empty property.
When setting a completion day, it is also a good time to check that you don’t owe any money to the mortgage lender or the loan company, especially if you are selling your previous home for less than your new purchase.
Unless someone is going into rented or borrowed accommodation, everyone in the chain - meaning you, the previous owner, and the buyer of your previous home - move house on completion day, or a day or two after.
When is the best time to complete?
Try not to complete on a Friday, because conveyancing and removals firms tend to be booked up on that day. In addition, if there are delays with finances, you could be stranded for a weekend and end up paying for your goods to be stored.
Find out more: Moving house checklist - get prepared for the big move
It's very rare for completion and exchange to happen at the same time. Your role in completion is to wait for a phone call from your legal representative telling you all is well and giving you the go ahead to move in.
You'll get the keys to your new property on completion day. At the same time, you and the mortgage company will pay any remaining money to the seller.
The money will be paid from:
- the funds from the person buying your previous house
- your new mortgage loan
- your own cash.
The money is transferred electronically between the legal firms’ bank accounts, each one triggering the next transfer.
This all takes time, especially if the sale of your previous home completes on the same day. If you are near the top of the chain, the system may run out of time to transfer funds. It's wise to have a contingency plan where you could stay overnight, just in case you hand over the keys to your house and end up with nowhere to go.
Find out more: Packing and preparing to move house - get everything in place for moving day
Making your next move easier
The first thing to do once you’re settled into your new home is to file away all the paperwork related to the purchase.
This will be a useful resource for any issues relating to the sale, or help you when you put the property on the market in future. The information will be essential when you come to sell, even if it’s not for 10 years. So include in it:
- the sale particulars of your home
- the EPC
- your buildings and contents insurance
- estimates from builders and tradesmen for work to be done
- safety certificates, warranties and guarantees
- correspondence and notes about your agent, survey, legal firm and mortgage.
- Last updated: October 2017
- Updated by: Stefanie Garber