Do you have to agree a completion date before exchange?
Whilst there doesn’t have to be a set time between exchange and completion, can you exchange contracts without a completion date?
Can you exchange contracts without a completion date inless than 20 seconds…
The exchange of contracts for house buying is the process that makes the transaction legally binding. The next step in this process is completion of the contracts. Which is generally 30-days after exchange. But there doesn’t have to be a set time period between exchange and completion. The time between exchange and completion can be whatever period of time the parties require and agree in order to be able to get themselves ready for the completion date. But before exchange can take place, you and the seller will be required to agree a completion date.
What is exchange and what is completion when buying a house?
In order to understand the question “can you exchange contracts without a completion date“, it’s better to explain what ‘exchange‘ and ‘completion‘ are in relation to house buying.
What is Exchange of Contracts?
In England and Wales, exchanging contracts is the last but one step in a house purchase. Where completion is the final step in the process.
Under English & Welsh law exchange of contracts occurs after your solicitor has carried out all necessary searches. It’s after the mortgage has been arranged where necessary, the surveys are complete if required and there is agreement to the terms of the contract.
Once each party has signed the contracts and they have been exchanged between solicitors on either side, they are legally binding. For the exchange of contracts to be binding in law, there’s has to be whats referred to as ‘consideration‘.
Consideration in this case will be the ‘exchange deposit‘, which is generally 10% of the purchase price.
Up to the point when you exchange contracts, the house buying process is not legally binding in English and Welsh law. Prior to exchanging contracts, either a buyer or a seller can pull out of the process at any time.
What is completion of contracts?
Completion is when the balance of the payment for the property is passed over to the seller’s solicitor. It’s the point when ownership transfers to the buyer. This is the last thing that happens in the house buying/selling process. This is done between the buyers sellers solicitors.
The date of completion is when you physically own the property. After this date, your solicitor will notify the Land Registry of the transfer of ownership. It is on this date that you are also liable to pay the Stamp Duty on the purchase price of your new home.
Do you have to agree a completion date before exchange
To answer the question posed at the start of this article, which was “Can you exchange contracts without a completion date?” The simple answer is no you can’t.
Before exchange of contracts can take place, you and the seller will be required to agree a completion date. The completion date, which is the date when you’ll physically own the property, needs to be written into the contract before exchange takes place.
Once both parties have agreed the date of completion, the conveyancing solicitors will do their final checks and then exchange contracts.
Generally, the period between exchange and completion is 30 days or a month. But this can be any period you like and in some cases the completion date can be delayed to help the sellers buy their next property.
How to make a delayed completion work in your favour
A delayed completion is where the date between exchange and completion is extended beyond the usual 30 days. The period between exchange and completion can be any time period you want it to be. But the period needs to be agreed before exchange of contracts between both parties to the contract. This could be 3 months between exchange and completion or longer.
With a delayed completion, your solicitor will write the completion date into the contract.
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