Exchanging contracts is viewed as one of the most important stages of purchasing or selling a property because it is the moment at which ownership is officially transferred between parties. More generally, it marks the point at which both the seller and the buyer can start to relax, as the contract is now legally in force and they can start looking towards the next stage of their lives.
The final stage of the conveyancing process involves the exchange of signed contracts. Before this can happen, the buyer will need to have paid the deposit, which is typically facilitated over the phone. Following the successful transfer of funds, the conveyancers for both the seller and the buyer must agree to send over the signed contracts. When this process has occurred, the sale of the property finally becomes a legally binding agreement.
The exchanging of contracts can so often appear to be surrounded by a certain air of mystery, so here is everything you need to know about this process.
What happens during the contract exchange?
Despite being one of the most momentous parts of the buying and selling process, the exchange of contracts is actually also one of the more straightforward processes.
Both parties must agree to the conditions associated with the contract
Respective contracts are signed by each party
The buyer’s legal representative will collect the proof of mortgage offer and deposit
A completion date is set
All appropriate documents are exchanged
Both parties are legally bound to the sale of the property and the agreed-upon completion date
Until contracts are exchanged, both parties can pull out of the sale with no repercussions.
How are contracts exchanged?
As the contract exchange is completed by your conveyancing solicitor, it is vital that you have full confidence in your legal representation to avoid unnecessary delays to the process. It is important to work with a reputable team, such as Sam Conveyancing, as this will give you the peace of mind that everything is being done to keep the process on track.
Some conveyancers will exchange contracts in person, but most choose to complete the process over the phone in an exchange that will be recorded in its entirety. Before both conveyancers formally agree to post the signed contract from their client, all parties must have officially agreed to the finalised terms of the contract. Notably, if plans to digitise the house buying and selling process reported in the Law Society Gazette go ahead, the contract exchange process may become even more efficient.
How long does the contract exchange take?
Generally, the exchange of contracts is completed in just a few hours. However, this time frame will vary depending on how many parties are in the property chain and the type of transaction that is occurring.
When are contracts typically exchanged?
Although this can vary on a variety of factors, contract exchange generally occurs at some point during the eighth week of the process. However, the following stages must have been completed before this can happen:
1. An offer must have been agreed upon, during which a form detailing whether any fixtures and fittings are included in the sale is completed.
2. All property searches and surveys must have been completed, which is why working with a team that can deliver a timely building survey in Oxford is vital to efficient transactions in the local area.
3. An official mortgage offer must have been issued alongside a proof of funding document covering the required deposit.
4. All parties understand and agree to all the details within the contract, including the completion date.