In the context of buying a home in the UK, "exchange" and "completion" are two significant stages in the conveyancing process. Here's an explanation of each:
Exchange of Contracts:
- The exchange of contracts is a critical milestone in the property purchase process.
- Once both the buyer and the seller have signed identical copies of the contract, they are "exchanged" between their respective solicitors.
- At this point, the transaction becomes legally binding, and both parties are committed to completing the sale/purchase.
- The buyer typically pays a deposit, usually around 5-10% of the property's purchase price, upon exchange.
- The completion date is usually agreed upon and included in the contract at this stage.
Completion:
- Completion is the final stage of the property purchase process, where ownership of the property is transferred from the seller to the buyer.
- On the agreed completion date, the buyer's solicitor transfers the remaining funds (the balance of the purchase price) to the seller's solicitor.
- Once the seller's solicitor confirms receipt of funds, they will inform the estate agent to release the keys to the buyer.
- At this point, the property officially belongs to the buyer, and they can take possession and move into the property.
It's important to note that the time gap between the exchange and completion can vary. It is typically several weeks to allow for necessary arrangements, such as mortgage finalisation, property searches, and the resolution of any outstanding issues. The specific timeline is agreed upon between the parties involved and can be influenced by various factors.
During the exchange and completion process, it's crucial to work closely with your solicitor or conveyancer, who will guide you through the legal requirements, handle the necessary paperwork, and ensure a smooth transition to homeownership.