How Long Between Exchange and Completion

04/05/2020
How long between exchange and completion can be any time which is mutually agreed between all parties in the chain, although 2 weeks is the most frequent time period. Most buyers want to exchange and complete on the same day which is possible but not advisable. We explain the pros and cons for how long the time should be between you exchanging and completing - quite often it comes down to what is logistically possible rather than anything else.

A Property Chain is the term used for all of the buyers and sellers connected via various sale and purchase conveyancing transactions; it most often has a first time buyer at one end and someone selling a home without buying one somewhere else at the other.


It is important to note that although some of the parties in a chain may opt for a completion date 2 weeks after exchange, there's no 'one-size-fits-all' as some in the chain maybe looking for a month - especially if the first time buyer at the bottom of the chain is in a rental with a 2 month notice.

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Choose how long between between exchange and completion

We will help you choose how long you should have between exchange and completion and examine the pros and cons for each of the following:

  • Exchange and completion same day / simultaneous exchange and completion
  • 3 days between exchange and completion
  • 1 to 2 weeks between exchange and completion
  • 3 months between exchange and completion
  • Exchange contracts without a completion date (new build/Help to Buy)

Exchange and completion same day

Exchange and completion on the same day is an option however it comes with logistical issues which normally stop it from happening. The biggest problem that stops exchange and completion on the same day is drawing down mortgage funds, however here are the other pros and cons.

Pros
Cons
  • Suitable for cash buyers - with no mortgage to draw down you aren't affected by mortgage lender delays.
  • Suitable for buy to let investors - as they aren't moving into the property on the day of completion and may also be taking on an existing tenant.
  • Faster completions
  • Very stressful - juggling exchange, completion and getting removals organised is not advisable and often dangerous as something could get missed.
  • Not suitable if you are getting a mortgage - normally takes 5 days for the bank to send the mortgage
  • Either party can pull out prior to exchange - if this did happen you could be potentially liable to pay unrecoverable third party costs such as mortgage interest and removals
  • No time to hand in rental notice - first time buyers in particular may be affected by this, may make this choice unfeasible (not too mention very expensive for them)

3 days between exchange and completion

This is a great option for a no chain and vacant property which is often adopted by first time buyers. In essence it gets the fastest completion after exchange and has very few downsides other than it may take your mortgage lender more than 3 days to send your solicitor the mortgage funds.

Pros
Cons
  • Faster completions - less risk between exchange and completion (see below what risks there are).
  • Suits shorter chains and vacant properties - shorter chains can work to the short time frame to pack and be ready to move out and move in.
  • Very little time to pack - does 3 days give the seller enough time to pack and leave the property in a reasonable condition.
  • Some mortgage lenders take 5 days - mortgage lenders can take 5 working days to send mortgage funds.
  • No time to hand in rental notice - if your notice period is 2 months then you'll be paying rent a mortgage repayments for months.

What is the best and worst day to complete?

You can choose to complete on any day that both the seller and the buyer agree to. Most people choose Friday as their completion day so they can tie in moving in with the weekend; maximising the time to unpack and get their life in order. However, with Friday being in such high demand, you can find the cost of removals are a lot more than any other day of the week. If you have the capacity to do so, choosing a Monday or a Tuesday to complete can save on removal costs and your solicitor is less likely to be busy.

Another issue of completing on a Friday is that if you do fail to complete, you have to wait until Monday before you can complete which means the breaching party is covering the other party's costs over the weekend. You can read more about the costs of failing to complete here.


1 to 2 weeks between exchange and completion

This is the ideal time between exchange and completion, giving both seller and buyer to organise themselves once they know they are legally bound to complete after exchanging contracts. Remember, prior to exchanging there are no guarantees either party will complete.

Pros
Cons
  • Suitable for first time buyers, repeat movers and cash buyers
  • Time to organise - buildings insurance, removals and packing once you know you have exchanged
  • Time to draw down mortgage - with a 3 to 5 day lead time to draw down a mortgage this is an ample amount of time to draw down the mortgage in time for completion.
  • Less stressful - More time to organise always means less time to stress especially as the exchange of contracts has legally bound both the seller and the buyer.
  • More likely the chain will agree - with so many other parties involved in the chain a 1 to 2 week time should suit everyone. Find out how a property chain works by clicking here.
  • You have to wait 1 to 2 weeks to move in - there are little downsides to a 1 to 2 week period between exchange and completion as it is the most common time frame to complete after exchange of contracts.

1 to 3 months between exchange and completion

This length of time is predominantly requested by first time buyers looking to tie in their rental notice period with their exchange. The formal notice period for assured tenancy rentals is 2 months. If you are tempted to hand in your rental notice before exchanging contracts then read this - Made Homeless After Handing Notice to Landlord

Pros
Cons
  • Suitable for first time buyers who rent with a 2 month notice - you can limit the time you have paying for rent and also paying your mortgage (it is always good to have a week between completion and moving out of your rental so you can make good any repairs the rental needs to protect the repayment of your rental deposit.
  • Time to organise - buildings insurance, removals and packing once you know you have exchanged
  • Time to draw down mortgage
  • Less stressful
  • Less likely the chain will agree - the majority of people in a chain want to have a 1 to 2 week period between exchange and completion so you may struggle to get the chain to agree to 1 to 3 months between exchange and completion.
  • You have to wait to move in

Exchange contracts without a completion date

When you buy a new build property you have to exchange contracts within 28 days after reserving the property. You are given an estimated time when the property will be built. The final build date can be delayed, however once the property has been signed off as completed by building control, the developers serves notice on you and you'll need to complete within 2 weeks.

Pros
Cons
  • Suitable for cash buyers - with no mortgage there is no concern over arranging mortgage funds in time for a future completion date. A completion date could slip and your mortgage offer won't go out of date.
  • Time to organise - buildings insurance, removals and packing once you know you have exchanged
  • Mortgage offer expires - you'll need to have a mortgage offer in place before you can exchange contracts, however most mortgage offers expire after 6 months. This could leave you exposed to not being able to get a mortgage when completion is served.
  • You have no control over when the property is built - new build properties often over run and it can be frustrating waiting for the property to be built.

Frequently Asked Questions

Why is there a gap between exchange and completion?

There is a gap between exchange and completion because of logistics and the conveyancing process itself. Right up until exchange either the buyer or seller could pull out from the transaction which would mean if you had been busy packing your stuff into boxes you'd need to start unpacking again; you have another 3 to 6 months of house hunting and the conveyancing process all over again.

The gap between exchange and completion can be reduced if:

  • The property is vacant
  • You are using removal companies for packing
  • You are a cash buyer


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What can go wrong between exchange and completion?

With so much paperwork and red tape before exchange you would think that the risk between exchange and completion would be minimal, however there are risks and these became even more profound during the Coronavirus outbreak in 2020. Here is what can go wrong between exchange and completion:

  • Buyer's loses job - if you lose your job then you must report this to your mortgage lender as it may effect their mortgage offer to you. If your mortgage offer is rescinded due to a change in your job then you won't be able to afford to complete.
  • Seller changes their mind - this can happen and whilst the seller will have to pay the buyer's legal costs and other remedies, the buyer is left without their new home.
  • Fall ill or Accident - this was one of the issues during the Coronavirus outbreak. Where either the seller or buyer become ill or have an accident that stops them from completing.


What's the difference between exchange and completion?

What is exchange?

Exchange of contracts is the point in the conveyancing process where the buyer and the seller become legally bound to complete the transfer of the title between each other. You can read more about - Exchanging contracts and Can your pull out after exchange of contracts?

What is completion?

Completion is the day when the balance of the purchase price is paid to the seller's solicitor, keys/access is provided to the buyer and the ownership transfers from the seller to the buyer. You can read more about - What happens on the day of completion?


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