Until contracts are exchanged either buyer or seller can pull out without any financial penalty to pay, other than to cover their own costs for solicitors (including searches and disbursements), surveyors, and mortgage valuations. This is why it is so important to protect yourself from financial losses by getting no sale, no fee cover from your solicitors.
If you have any questions about exchange of contracts, what you need to do or are concerned about how long it is taking to exchange contracts then call our conveyancing specialists on 0333 344 3234.
How do solicitors exchange contracts?Under the laws of England & Wales, exchange of contracts takes place once the buyer's solicitor has completed all of their investigations into the property to ensure the buyer is fully aware of any known legal pitfalls.
The actual process of exchange of contracts happens over the phone between the buyers and sellers solicitor. Both will verbally agree the property being sold, the buyers and sellers names, the price, deposit to be paid, completion date, additional conditions/amendments and then confirm that exchange of contracts can take place. After this call the properties are formally exchanged and the solicitors undertake to send to each other their client's signed contracts (hence the name - Exchange of contracts).
Can you pull out after exchange of contracts?Once you exchange contracts you are financially bound to buy the property however you can still pull out (and face the financial costs). As a buyer you are at greater loss if you have to pull out because you'll forfeit your deposit and will be liable for the seller's damages.
This is the reason why your solicitor must ensure you are financially ready to complete the purchase with an in date mortgage offer and in receipt of the money to complete the purchase, plus making sure you understand all of the legal issues.
It can be a tough decision if you have to pull out. Read our article on what happens if you have to pull our after exchange of contracts or call us on 0333 344 3234.
What do you need to do to exchange contracts?
Can I exchange and complete on the same day?It is possible to exchange and complete on the same say and this is called a Simultaneous. Although this sounds like a great idea and is becoming more the trend, it can end up delaying exchange whilst the tasks the solicitors complete between exchange and completion are addressed.
It can also make the process more stressful for you. Trying to book home removals or take time off to move is hard enough as it is, however when you have one day for exchange and completion to take place you are faced with the challenge of keeping everyone involved working to provisional times that keep getting pushed further back.
The average time between exchange and completion is 2 weeks and in this time you'll know the completion date and can book everything knowing your completion date won't change. As a first time buyer, you'll more than likely need the time because you'll be handing in your notice on your rental and won't want to do this until you exchange because you don't want the purchase to fall down and end up being forced to leave your rental - First time Buyers left Homeless After Handing in Notice
You can also read our article called - How long between exchange and completion