Coronavirus may have impacted the housing market, but buyers and sellers still want to know about the process they’ll need to go through. 

When you’re buying or selling your home, the exchange of contracts is an exciting time and a part of the buying process that shouldn’t be delayed. It’s the point at which the seller and buyer sign contracts for the sale of the house, and, most importantly, it’s the moment when the purchase and sale become legally binding.

Here, we bring you a guide to everything you’ll need to know about the process. We’ll give you our expert advice and answer your questions such as “how long does it take to exchange contracts?” and “what do I need to do to exchange contracts when I buy a home?” Read on to learn more.

In this article, you’ll find:

  1. How long does it take to exchange contracts?
  2. What happens when I exchange?
  3. What does completion date mean?
  4. What must I do before exchange and completion?
  5. When does exchange take place?
  6. Will exchange of contracts be carried out in person?
  7. What could cause delays?
  8. What needs to be done next?

How long does it take to exchange contracts?

The process to complete the exchange of contracts to take around 8 – 12 weeks in total. If there isn’t a property chain, it could be quicker than this. It’s important to note, though, that all sales are different. 

While some can move more quickly, others can take longer before the exchange of contracts is complete. Nevertheless, you can use our advice of 8-12 weeks as a guide to work with.

What happens when I exchange?

When you exchange contracts during the selling process or when you buy a home, the following process will be carried out:

  • The solicitors or conveyancers for both the buyer and seller of the property have a signed contract in their possession.
  • The solicitor for the seller holds the signed TR1 form (Transfer of Title Deed).
  • The solicitor for the buyer holds cleared funds for the deposit as well as a buildings insurance policy and mortgage offer when required.
  • The completion date has already been agreed upon.
  • The solicitors for the buyer and seller contact each other to confirm that they have the necessary legal documents to complete the transaction.
  • Exchanging contracts then takes place (typically in a telephone call) so that the transaction is then legally binding and nobody can pull out without incurring additional costs as a penalty. This involves reading out the documents to each other to determine that they are identical (i.e. that no included fixtures and fittings have been missed out and that no mistakes have been made regarding the financial terms and costs).
  • Once this has been done, each solicitor posts the documents to the other.
  • Both legal teams receive the contract paperwork in the post and give copies to their clients.

What does completion date mean?

You have probably heard the term “exchange and completion” used when talking about exchanging contracts. We have already looked at what it means to exchange contracts. So, what does it mean to complete? Here is our guide to the process:

Completion represents the final part of the transaction to sell and buy the property. It happens when the buyer’s solicitor receives confirmation from the seller’s solicitor to say they have all the money for the purchase.

At this point, legal possession of the property will be transferred to the buyer from the seller through the transfer and dating of the title deeds.

Typically, the buyer will be given vacant possession of the property by 1 pm and, therefore, the seller should leave the property by this point on the completion date. The buyer of the property will be given the keys by the seller’s estate agent and will be able to move in.

Completion occurs after exchanging contracts. The process is usually as follows:

  • The solicitor for the seller will receive the full money for the purchase of the house.
  • They will contact their client to confirm the receipt of the funds before contacting the seller’s agent and the solicitor for the buyer, informing them that the sale of the property is complete.
  • Usually, the seller will move out of the property during the morning of the completion day.
  • After 1 pm, the purchaser can pick up the key and can then go ahead with moving in with no further wait or delay.
  • After the sale is complete, the purchaser must pay the Stamp Duty (if necessary) to HMRC. Typically, their solicitor will handle this. You can find out more about Stamp Duty on the Gov website.
  • The buyer’s solicitor will then register the ownership of the property on the buyer’s behalf with HM Land Registry.
  • The purchaser is required to ensure the money has been paid and the ownership has been registered.

What do I need to do before exchanging contracts?

You should only exchange if you’ve completed all the following things:

  • Agreed on the offer, including for any fixtures and fittings.
  • Had a mortgage valuation and had any surveys carried out.
  • Received a written formal mortgage offer.
  • Arranged the funds for your deposit and ensured that the deposit has been paid.
  • Had your solicitor or conveyancer check the necessary searches.
  • Arranged buildings insurance.
  • Agreed on a completion date for your sale.
  • Read the contracts and understand them.
  • Arranged to pay your solicitor or conveyancer your deposit or provide proof of funds.
  • The signing of the contract or agreement, the lease or transfer and the mortgage deeds.

Once all of these things are done, nothing should get in the way of moving. You can go ahead, exchange and prepare for your move.

When do you exchange?

How long it takes to exchange will depend entirely on the property chain. However, it will generally happen between 7 – 28 days before completion, although in some cases it will happen on the same day with the purchase completing straight after the contract has been exchanged. 

The most common day for the contract to be exchanged is a weekday, and often it will occur at around midday.

In some circumstances, though, things don’t always go according to plan. When properties don’t have a purchaser lined up in a chain, the conveyancing process could be significantly delayed. 

After the legal contract has been exchanged the date for completing could be put back for a long time with a wait of weeks or even months.

It’s vital to be aware that however long it takes to find buyers, a mortgage offer will generally only remain valid for a period of six months and no longer. This is something that will also have an impact right down the chain.

How are contracts exchanged?

Most often, exchange of contracts occurs via telephone and each solicitor posts the paperwork to each other. In a few cases, though, it will take place in person. 

If there is a lot of interest from many people who want to buy, this method can give the purchaser an advantage when it comes to securing the house. It also eliminates the possibility of gazumping.

 Meanwhile, the seller will be able to more quickly access capital. Only cash buyers can use this method though as getting a mortgage requires extra time.

Could anything cause delays?

When you buy or sell a house, several factors could result in the plan going wrong and hold-ups occurring in the conveyancing process. Even the best planning may need to change depending on different circumstances. Some causes of hold-ups include:

Property chain size

If you’re planning to buy an older home or if you’re selling a house to someone who is an existing house owner, anything that causes a problem in the chain could result in a hold-up. Even if you’re first time buyers who are currently renting and are keen to move in straight away, the person selling the house needs to find another home first.

Exchanging can’t take place until a completing date has been agreed and this may end up making the process long and drawn out. If you’re buying a brand new home, though, you won’t have these issues.

If you’re buying a new build property, you won’t encounter this type of delay. However, property developers may still fall behind schedule. It’s important that you stay in regular contact with the sales agent of the development to ensure everything remains on track.

Mortgage lender issues

You may have already received your loan offer in principle which allows you to make your offer on the house. However, exchanging can’t take place unless a formal offer from your lender has been received. If banks have issues with applications it can cause waits and hold-ups.

Valuation differences

When your mortgage lender values the house, there isn’t any guarantee it’ll match the price you’ve agreed to pay. If they give you a lower valuation they’ll only be prepared to give you the mortgage if you’re buying at this lower price. Financial issues like these can be resolved but still take time.

Hold-ups with checks and searches

There are a number of things your conveyancing team need to check out and deal with when you’re buying a house. These searches involve carrying out a check with the Local Authority, Water Authority and other bodies. 

Although you don’t deal with these things personally, it takes time to receive the results in the post, and they are essential since mortgage lenders require them.

These searches may still not be done for as long as 6 weeks and this makes the process of completing take longer overall. If a check or search reveals anything unexpected, this may also have an impact right down the selling chain since buyers may decide to pull out. There is little that can be done to speed this part of the process through.

Guides offering advice for speeding up the process include the following tips:

  • When making your offer give the estate agent the conveyancer’s details immediately.
  • Get all documentation relating to the house including leasehold documentation ready in advance.
  • Give your conveyancer everything they require straight away including payment for the searches.
  • Use a reputable mortgage broker with experience in expediting offers.
  • Get the survey done as quickly as possible.
  • Make deposit funds easily accessible.
  • Arrange buildings insurance for the day of exchange.
  • Avoid going on holiday – two weeks away from the process will just result in extra hold-ups.
  • Choose a skilled and experienced conveyancer.

What do I need to do next?

Whether you’re selling or purchasing, there are several things that must be done at this stage before moving into your new home.

  • Ensure the house on risk from exchange.
  • Go to the house and ensure everything agreed remains in place with no damages.
  • Send your lender a copy of the title deeds.
  • Inform HM Land Registry that you are now the owner.
  • Contact your utility companies and banks.

Mick Silver

Mick Silver

Mick Silver is the CEO and co-founder of Moovshack. With over 20 years in the property industry. After working with traditional estate agents, Mick decided to launch Moovshack; a fully interactive property app.