What happens before exchange of contracts?
Exchange of contracts is one of the penultimate stages in the conveyancing process. Once contracts have been exchanged, both parties have legally agreed to transfer ownership of the property on sale on a specified date. Normally, on the day of exchange, the respective solicitors of the seller and buyer will finalise the terms of the agreement over the phone. Due to the legally binding nature of these contracts, there are a few important checks and procedures that need to take place before exchange.
As a buyer or seller there are a variety of things you should verify before you exchange. Firstly, you must make sure that all the relevant searches have been carried out to avoid any nasty surprises on either side. Also, it is important to avoid any potential issues with your mortgage. This can be achieved by having your mortgage offer in writing and having the funds for your deposit readily available.
It is also essential that you agree on a completion date before you complete so that you have a good idea of time scale. Normally exchange takes place 7-28 days before completion. In any case, exchange cannot take place without a completion date as that is the crux of the contract which is being entered into.
Another way to ensure that you are happy and content with proceedings and to avoid any last minute surprises is to check and re-check the minute details of your contract once your solicitor sends it over. This is paramount as if you sign the contract and realise you do not agree with something, it would be difficult to go back due to the legally binding nature of the process. You are also advised to keep a healthy working relationship with your conveyancing solicitors. This will make the process simpler and easier for you as you will be able to ask questions if you don’t understand any terms or conditions on your contract. Keeping in regular but friendly contact also prevents any delays in processing paperwork and ensures that your property is bought/sold as quickly as possible. This convenience and ease is a great help in what can often be a long process.
Finally, after contracts are exchanged you are responsible for the property and keeping it in the condition in which it was put on the market. A way to protect yourself with this is by organising building insurance in the off chance that something may go wrong. Most importantly of all, you must have the necessary funds for the contract deposit. This is usually 10% of the purchase price but in the current climate it can also be less.
If you use all the steps and checks above as a checklist before you exchange contracts, you can be assured that your progress to the next stage of your conveyancing journey will be as easy and as stress-free as possible.