7 Things you need to know about exchange and completion

7 Things you need to know about exchange and completion

So, you’ve had an offer on your house and are moving towards exchange and completion. Great!

You, your buyer and everyone else in the chain will be keen to exchange contracts as soon as possible. Once contracts are exchanged, both buyer and seller are legally bound to complete the sale.

Here’s where things sometimes get confusing or difficult, because many people don’t fully understand how completing on a house sale works. Here are the 7 things you need to know about completion:

1. The completion date is agreed prior to exchanging contracts.

2. Where a chain is involved, account has to be taken of everyone’s circumstances and requirements – such as fitting in with term dates where children are changing schools, expiry date of mortgage offer, etc. Typically it is two to four weeks after exchange. However it can be simultaneous (often the case where an Investor is buying an empty property). Or it could be several months hence, if that’s what works best for everyone.

3. The completion date is whatever date the Buyer and Seller mutually agree. There is no time limit. You and your buyer could agree to exchange in 5 years time if that’s what you both want! Some people actually choose delayed completion – see here

4. If your buyer does not complete by the time and date agreed, they are in breach of contract. Your solicitor can issue a Notice to Complete. They will have to pay penalty interest and compensation to you.

5. When a Notice to Complete is issued the Buyer has 10 working days to complete. If they fail to complete within this timescale, you can rescind the contract. The Buyer will forfeit the 10% deposit, which, along with accrued interest, will be paid to you.

6. Because of the penalty, most Buyers will find a way to complete within the 10 days!

7. More commonly, completion is delayed for of a day or two – which is inconvenient but not life changing. You should inform your solicitor immediately if this happens and they will liaise with the buyer’s solicitor to try and resolve any issues. You can claim compensation from the Buyer for any expenses incurred as a result – hotel stays, additional removal costs, and so on.

Moving house is often stressful and if you’re affected by delayed completion this will undoubtedly add to it. Fortunately, aborted sales post-exchange are rare and at least if this happens you’ll have a windfall as compensation!

By Richard Watters

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