If you are buying your first, second or even third property, one of the common questions is always “How long between exchange and completion?”. In this article, we look at the answer and then explain the reasons that can make this period longer and how YOU can help to make this time period shorter.
How Long Between Exchange And Completion?
Here are some common lengths of time between exchange and completion:
- Two weeks (the most common period)
- The same day (happens more than you might expect)
- 3-7 days between exchange and completion
- No set time to complete (new build properties)
Average Time Between Exchange And Completion
The most common time between exchange and completion is two weeks, and there is a good reason for this length of time being the common time, because some actions have to be taken to ensure that completion can go ahead smoothly on completion day.
- •ooking a removal company for the date of the move. Many removal companies, whilst being as flexible as they can be, need time to ensure that the lorry and removal men are reserved for your moving day. If they are not given enough notice of the date of completion (your moving in date) they might not be able to accommodate your moving date. This means that you then either have to move in at a later date than your completion date, or you have to find another removal company. If this happens, your first company is likely to keep your deposit paid to secure their services, AND the second removal company are likely to charge more due to the proximity of your moving date.
- Your conveyancing solicitor obtaining the monies needed from the mortgage company to enable them to pay all of the monies due to the seller’s solicitor on completion day. Mortgage companies often need up to a week to get the money to your solicitor.
- You need to let your solicitor have the deposit that you are paying to top up the mortgage to the full asking price. The deposit is often 10% but can be agreed at 5% if you are going to have a 95% mortgage.
- In addition to the deposit, you also need to ensure that your solicitor has enough money so that on the completion date they can cover all of their costs and expenses and any other costs and expenses due. The seller will need to ensure that their solicitor has enough money to pay the estate agent as well as their legal fees and expenses. The solicitor will pay all of these costs before sending the balance of the sale proceeds to the seller.
- The seller of the property needs time to pack their belongings, book their removal company and carry out any agreed repairs to the property before you move in.
Challenges With Exchange And Completion On The Same Day
Whilst you can exchange and complete your house purchase or sale on the same day, it is not for the feint hearted.
Consider that you have to do all of the things listed above on the same day.
- Your solicitor needs to receive the money for the purchase from you and your mortgage company, then pay it all to the seller’s solicitor.
- The removal companies have to be ready to move both the buyer and the seller when the phone call comes from the solicitor,often around midday, but if there are delays in receiving the monies from the mortgage company, which there often are, it can be as late as 4pm. This does not give the seller a lot of time to get out of their house and for you to move into yours.
The writer of this article has exchanged and completed on the same day and can safely say it was very stressful indeed!
That is why we recommend leaving a period of one to two weeks between exchange and completion.
Buying A New Home – There May Be No Set Date For Completion
When you buy a new home, if it is still in the process of being built, the seller (the developer of the new site) will want you to exchange contracts so that they receive your deposit and are certain of selling the property to you.
They may need to sell certain properties off plan to receive further monies from their funders to complete the development of the site.
The length of time between exchange and completion on new build properties varies but it can be as long as 9 months.
What’s more, the developer of the new build property may well push for you to exchange as soon as 28 days after you say ‘yes’ to buying the property.
Exactly when you will complete will depend on how far along the property build is, but you will often only be given 10 days notice to complete by the developer.
What Does Exchange Of Contracts Mean?
Once you exchange contracts, the period when the property was Sold Subject To Contract ends.
You pay a deposit to the seller and you are now liable to buy the house. If you pull out, you will at least lose the deposit that you have paid, but you will also be liable for expenses incurred by the seller and interest on the unpaid purchase price, which can be substantial.
It is for this reason that you should not exchange contracts if there is any doubt about whether you will be able to complete the purchase.
What Happens On Completion Date?
The buyer’s solicitor sends the balance of the purchase price to the seller’s solicitor. Each solicitor calls their client to confirm that completion has taken place.
The estate agent releases the keys to the buyer and the move takes place.
If you have just sold your property and have a large sum of money left over (moving into rental or downsizing) you should seek independent financial advice to make the best use of your money.
Solicitors Near Me can help you with both of these vital legal documents by introducing you to a solicitor for a free, no obligation discussion with them and to explain the costs of each document.