A Beginner’s Guide to Exchange and Completion
When you buy a house for the first time, all of the legal, financial and technical jargon can be daunting. All house sales and purchases are different. They all have their own timescales, and they all have factors that can potentially cause complications. However, there are certain elements that are always the same. These are legal steps that have to be followed.
The key point is when you have exchanged contracts. This means that the sale is almost certain to go ahead. There are a lot of costs associated with buying a house as well as the actual purchase price. However, it is not a good idea to cut corners with cheap conveyancing services, as things can go wrong – as in the examples shown here: https://www.samconveyancing.co.uk/news/conveyancing/conveyancing-for-99-the-scam-of-cheap-conveyancing-289.
Here’s a simple guide to exchange and completion.
What Happens Before Completion?
As the buyer, you pay a deposit to the solicitor representing the seller. This will usually be 5% of the purchase price. According to the Money Advice Service, the best way to ensure a trouble-free bank transfer is to double-check every single figure, even if the banking website or app preloads them. Getting your money back after an erroneous transfer is not easy.
If you pull out after this, you will lose the deposit and could even get sued by the seller. There will be several legal documents (including the contracts) that need to be signed by both the buyer and seller and exchanged. Documents are sent by recorded delivery.
At this point, a date is set for completion. This is when the money will change hands. It is usually two weeks between exchange and completion, but it can also take place on the same day in some circumstances. It’s a good time to plan your move.
Releasing the Money and Final Checks
Most houses are purchased using a mortgage. Therefore, the lender has to receive the Certificate of Title before they will release the money. This document contains the details of the ownership of the property and of the type of property ownership (usually freehold or leasehold).
Final checks are made, and then the money is released to the buyer’s solicitor, who forwards it to the seller’s solicitor. This is called completion, and the buyer can pick up the keys and start moving in.