A house sale is a significant commitment for both parties.
So, the agreement must be put in writing.
That’s where the exchange of contracts comes in.
What is an exchange of contracts?
The exchange of contracts is when the buyer’s and seller’s solicitors exchange signed contracts.
It happens close to the end of a house transaction and makes the property sale legally binding.
If you pull out after this stage, you could be sued for damages. And you’ll potentially lose your deposit.
Before the exchange of contracts, the sale is not binding. This means the buyer can change their offer, and either party can still walk away without penalty.
Completion day
The only step after exchange of contracts is completion day. In some cases, these occur on the same day, although this is rare.
Completion day is when the buyer receives the key to the property and the seller moves out.
When does exchange of contracts take place?
In most cases, the exchange of contracts happens around two weeks before completion day.
It could be sooner or later, depending on the circumstances.
The exchange of contracts is usually the penultimate thing that happens in a house sale.
Do solicitors charge more for handling exchange of contracts?
Any conveyancer or solicitor who supports you should include this in their services. It’s extremely rare to charge for this as a separate service.
Remember that even if the sale collapses, most solicitors still expect payment.
This means you’ll owe money even if the exchange of contracts hasn’t occurred.
All of these details should be outlined in their contract. Make sure you ask them questions if you’re unsure.
Does the exchange of contracts happen on completion day?
Not usually. This can happen sometimes, although it is rare.
Exchange of contracts usually happens between one to three weeks before completion. It can sometimes be longer.
How long does it take to reach the exchange of contracts?
Once an offer is accepted on a house, it usually takes around 4 months to exchange contracts.
This can be longer if you’re in a property chain. Or it can be quicker if you’re chain-free, and everything moves smoothly.
Your conveyancer should give you regular updates throughout the process, so you know how things are going.
Is the exchange of contracts a legal requirement?
Yes. A contract is needed when such a major transaction takes place.
It outlines all the terms and ensures neither party is misled. You can rely on it if any disputes come up further down the line.
Without the exchange of contracts, your transaction is not binding in a court of law. And either party could use this to its advantage.
Can you handle the exchange of contracts yourself?
In theory, yes, but you should pay a qualified solicitor or conveyancer. This avoids mistakes and ensures the contract is valid.
You should only attempt to handle conveyancing yourself if you’re qualified and experienced. In other words, if you’re a solicitor yourself.
