Please help! Exchange and completion date

[Charliechoco]

We found a property we love! And about to put an offer down. Could someone explain what the completion and exchange date means and what is a good amount of time?

We were ideally looking to have both arranged on the 1st of May - is that too long a wait for the vendors?

There is a ton of stuff that happens before dates get discussed ... although may seems reasonable

Exchange - once this happens there are penalties if anyone backs out , and you become responsible for insurance on the property . Exchange is great - it's u likely things go wrong after that. Typically 10% of the cost is due then. I am guessing you are a first time buyer - do you have a 10% cash deposit ?

Then ( England ) completion is when you get the keys and pay the rest

Usually people have 2 weeks between the two dates

It can happen on the same day especially if there are problems getting the cash deposit

Oooo how exciting! 😊😊 such a great feeling isn’t it?!

exchange is when everything is finalised legally and no going back.

completion is the deposit funds being transferred.

it is possible to have both done on the same date if you agree this with your conveyancer.

we completed very quickly, exactly 3months from putting in an offer but that is super speedy and we didn’t have a chain as we were first time buyers and the man we bought from was moving in with his daughter.

all the best of luck! It will be a rollercoaster until you have completed but do remember it will totally be worth it!!

It generally takes at least 3 months for paperwork and finances. It is possible to exchange and complete on same day, but especially if there's a chain this is not ideal. Definitely do not attempt this on a Friday, as if something goes wrong it can't be sorted during the weekend

Why would you want to exchange and complete on the same day? That means you have no notice of when it is actually going to happen, and it's a mad rush on the day.
I'd go for at least 2 weeks between exchange and completion to give everyone time to organise themselves. If you have to give notice on a rented property, or organise removals, or builders/decorators , you'll need as much time as you can get.

May is possibly a bit far as some mortgage offers expire after three months. However I wanted to move quickly and my crazy chain took from January till June last year. There is no point discussing exchange and completion dates until your much further along the process. It also depends if you're in a chain and how long the chain is ie do your vendors have people they are buying from and them in turn. There were 5 in mine and we all had to agree and the whole thing nearly fell apart repeatedly. If you already have a house you have to wait for the keys then get the housed packed up and moved and unloaded the other day the other end. So you have to book movers in advance and loads of other things. It's wasted money if the move doesn't happen or gets delayed. So most people will want a couple of weeks in between. Solicitors also need some time to do all the stuff to process the money of it's more expensive. Slightly different picture of your just buying an empty non probate house with no onward sale but that's pretty rare

Normally you don't start discussing exchange (when deposits go up the chain.and binding contracts are exchanged) and completion (when the money all arrives ans you own the house) until a lot later on when most of the legal stuff is done. The exchange date will generally be suggested by solicitors, and the completion date will be negotiated.

If the house is in a chain (eg you may be a first time buyer but the people.you are buying from someone who are buying from.someone...until the last person isn't buying) then this is all negotiated as each purchase is dependant on the other.

It isn't generally advised to do both on the same day. Until contracts are exchanged (which is gernally after securing mortgage, having a survey, lots of legal stuff etc has been undertaken) anyone can pull out at any time without penalty. Many mortgage companies also have specific requirements around this too- often a week or so.

We really don't have enough info here to advise, and you certainly won't be in a position to suggest any kind of firm date at offer (you can say 'ideally we would.like to love at x time', but no-one can commit to that fully as they have no idea on the legal work required, status of any chain etc). If you are bottom of the chain, it is unlikely you will get a huge amount of say if the rest any chain are in agreement.

It might really help to read more around the house buying process where you are in the UK (Scotland has a very different system from England, for example) so you have a better understanding of how it works. There are a ton of useful resources online- but without a country, it's hard to suggest any.

Exchange - this is regarding the contracts. Your solicitor and theirs will call each other up and read the exact same contracts out to each other - in there will be everything you've agreed. Exchange is deemed "done" when you've transferred the deposit of about 5-10% to your solicitor. This is also part of your mortgage deposit, so no additional monies. If you have a 20% deposit, 5-10% of it will go to your solicitor who moves it up the chain (if there is one) or holds it in case you back out of the contract. If you do back out, you pay the penalty (that 5-10% ) to the vendor. From completion, your mortgage company will say you need home insurance on the house only. The house is still under the vendor's ownership.

You agree a completion date with the vendor.

Completion - you send your solicitor the remaining funds (do this earlier in the week, not end of week!) - give yourself time for this before the completion date because of bank processing time etc. On the day of completion, Your solicitor sends it to the vendor's solicitor. Once they confirm they have the money, you pick up the keys from the EA. The house is yours from this day, you pay your first mortgage payment.

I agree with people saying expect to leave 2 weeks or more between exchange & completion, it’s a lot less stressful than simultaneous exchange & completion. Even if it suits you to do both on the same day, you will likely struggle to get everyone else in the chain to agree to it as most people don’t like the idea. The dates are something to be negotiated between everyone in the chain, not the choice of one individual. Though your wishes are as valid as everyone else’s.

1st of May sounds possible for Exchange but it’s too early to suggest a specific date to people in the chain as a lot of things have to happen first that could potentially delay things, like survey results.

Sorry to jump on your thread OP but how does exchange happen regarding 5-10% monies if you're downsizing and paying off your mortgage.

So I have £58k on my mortgage, selling for £275k and buying for £200. My mortgage will be paid off. Does my mortgage company release those funds?

The time between E&C varies and although people say a week or two is normal, it can vary considerably but as long as both parties agree, there is no problem.

Sold a probate property a couple of years ago and E&C took place on the same day*.
When we recently moved into a newbuild we agreed a gap of five months between E&C on the sale of our old house.

*Buyers were stringing out the purchase (all sorts of delaying questions) and we were getting ready to cast them adrift. The final straw was when they said they had ordered a new kitchen and could they store it in the (empty) house but still with no suggestion of dates.
We said no and suddenly, the whole deal was wrapped up and E&C happened a couple of days later with the kitchen being delivered the following day.

@BG2015 In most cases, the deposit from the bottom of the chain travels upwards, so you won't need the money up front at exchange. If the chain fails to complete at the agreed time, then the one who caused the failure and those above them who cannot complete are liable for their deposits from the point of failure upwards (though in reality there is often a lot of suing going on).

Hoping that makes sense...

Ahhh ok

What a stupid system 🙈

@BG2015 In a way. But it means that you don't need to find stupid amounts of money to move once you are on the ladder (except for stamp duty, but that's another story)

I remember having a panic about that the day before exchange on my first sale/purchase transaction.

Sold for £180k and buyers had a 10% deposit. Buying for £240k and a 10% deposit in the contract, meaning an extra £6k in deposit, which was effectively coming from the additional equity I'd built up in the first property.

Suddenly had a panic that I was going to have to find £6k to top up the difference. I'd budgeted for everything and it was a very tight move and I didn't have a penny to spare. Thankfully the solicitor explained as you have, so I was very relieved!

Solicitors would do well to have a "cheat sheet" type document that they send to all buyers/sellers of property to explain the process in a sort of idiots guide way!

@Charliechoco I know of someone recently who went from listing their property to completing on it within 7 weeks, so fast transactions can be possible, but realistically most take at least 12 weeks to get to completion and longer if there is a long chain.

There are lots of hoops that the conveyancers have to go through to make sure the property doesn't have any issues (both physically and legally), then it's a case of coordinating everything - completion dates for all the properties in the chain are the same day, mortgage offers, surveys, searches, etc. It all takes time.

If you're putting an offer in now, the conversation about dates will take place once the legal matters are underway. Have the owners of the property you want found somewhere else, for example? If they haven't they'd either have to move out in to rented or with family, or, as is more often the case, you have to wait for them to find somewhere.

Good luck OP

This is a helpful article on buying a property - Money Saving Expert