When purchasing a property, there are key moments in the buying process. One of the most crucial steps is the exchange of contracts. This is the moment when both the buyer and seller are legally bound to complete the transaction. Here is what happens when you exchange contracts.
Agreeing on Terms
Before exchanging contracts, both parties must agree to the terms of the sale. This includes the price, completion date, and any conditions of the sale. Once both parties have agreed to the terms, they will sign and exchange contracts. Typically, the buyer’s solicitor will draft the contract and send it to the seller’s solicitor for review.
Deposit Payment
When the contracts are exchanged, the buyer will need to pay a deposit. This is typically 5-10% of the purchase price, but may be negotiable. The deposit is held by the seller’s solicitor until completion, where it will be put towards the total purchase price.
Completion Date
The completion date is the day when the buyer becomes the legal owner of the property. This is agreed upon during the exchange of contracts. Typically, completion occurs within 1-4 weeks of exchange, but can be longer if agreed to by both parties. During this time, the buyer will need to arrange their mortgage, pay their solicitor’s fees, and prepare for the move.
Completion Statement
On the day of completion, the seller’s solicitor will provide the buyer’s solicitor with a completion statement. This statement outlines the final amount owed by the buyer, including the remaining purchase price and any other costs. The buyer’s solicitor will then transfer the funds to the seller’s solicitor and completion takes place.
Transfer of Title
After completion, the seller’s solicitor will transfer the title of the property to the buyer. This includes registering the property with the Land Registry, which typically takes 1-2 months.
In conclusion, exchanging contracts is a vital step in the process of purchasing a property. It legally binds both parties to complete the transaction and sets out the terms of the sale. Once contracts are exchanged, the buyer will need to pay a deposit, arrange their mortgage, and prepare for completion. On the day of completion, the final amount owed is settled and the transfer of title takes place. It is important to have a solicitor who is experienced in property transactions to navigate this process smoothly.
최신 댓글