Exhange of contracts to completion: time period

Exchange of contracts and completion are one and the same I believe.

Geordie

Then you are mistaken.

Exchange is when the contracts are signed, when the agreement becomes binding. All the eyes are crossed and the teas dotted.

Completion is when what was agreed in the contract is actually done, i.e. when money and keys change hands.

Usually the contracts would state when completion is to occur. So if you *have* exchanged, you should already know when completion is due. Ask your solicitor.

No they are not. Exchange of contracts can take place a considerable time before the purchase is completed. In many cases they are simultaneous, because of the inability of the chain of purchasers and sellers to fund the required 10% deposit without selling their existing property.

I exchanged contracts on a new house, being built, about 5 months before completion. Had I not done so, the developer would have withdrawn it from sale and increased the price (in 1977-8).

it is normal practise to have between 2 and 6 weeks between exchanging and completion. Once you have exchanged ensure that you have set up Buildings insurance for he property you are buying. Eric

Be careful. You need to make sure all the paperwork can be done within the time to Exchange contracts. For example, the buyer needs to get his solicitors to perform a 'search' on the property to ensure that the land belongs to you if you bought it and that there are no major new developments that are going to happen that will devalue the property. This requrires communication with the land registry and no matter how fast your solicitors act, they cannot really speed up this part of the process. Therefore, its not good to exchange contracts under 3 weeks unless you are sure that you are able to perform this task speedily.

AMO

2 weeks is normally about the minimum. We exchanged contracts on my property on July 28th, with completion taking place on August 12th.

Chris

The minimum is nothing, or, in other words, exchange and completion on the same day.

While traditionally there is a gap of 4 weeks or so between exchange and completion, these days anything goes, so ask your solicitor.

Neil

That must be incorrect, you'd get searches etc done before exchanging, since after exchanging you will lose your deposit if you decide not to proceed (after finding a problem with a search)

I was a first time buyer in October last year. We completed a week after we exchanged contracts. I know of people who have done it on the same day, and others who have had a 2 & 4 week gap. There is no set time - it will change case by case. In your situation where there is no chain involved at all (either up or down stream), I would suggest a week. That way you have a week where you KNOW you are going to move and can organise. If you try and do it on the same day, you could be ready to go and there may be a delay - causing you to live out of boxes for a week or so until it is sorted.

"Ronald Raygun" wrote

Agreed!

"Ronald Raygun" wrote

Hmmm. I recently signed my contract the **week before** exchange (and completion happened the same day as exchange).

There is no reason that exchange has to happen the same day as the contracts are signed - indeed, contracts can be signed by the two parties on different days!

But you alone could not create the contract. Presumably the other party signed a week after you did. "Exchange is when the contracts are signed" was supposed to be taken to mean when all the signing has been done. It's really the last signature which pulls it all together.

Rubbish. There's no reason a contract cannot be phrased in such a way that the deal's off if there's a problem with the search which the seller cannot rectify at his own cost within a certain period.

Indeed, that is normal in Scotland, where for that reason plenty of time is allowed between exchange (conclusion of missives) and completion (entry date) to allow all the donkey work to be done. The advantage is that you get the binding agreement much earlier.

There is no question of losing a deposit since none is given. The agreement is binding and in extremis if a buyer drops out after concluded missives he can remain liable for up to the full purchase price, more usually for the additional cost of re-marketing and making up any shortfall in the next price to be agreed, plus interest.

There might be no reason *in theory* but AFAIK its not normal practice to do that in England (I'll ignore your Scottish stuff since the original question seemed to be related to English law.

It did, yes, but it's not a matter of law so much as of practice, and there is scope for intermingling some aspects of the two different systems. For instance, the Scottish practice of prospective buyers commissioning surveys prior to offering is waning. The trick is that the buyer offers subject to survey, the seller accepts the offer subject to the "subject to survey" condition being deleted, then the buyer quickly organises a survey and then either pulls out, or agrees to remove the condition provided the cost is reduced by £5k to pay for dry rot treatment.

In the end, it's money talking. If some English chap is struggling to find a buyer, and this canny Scot turns up and offers him as much as he can hope to get provided the *seller's* solicitor does all the hunting out of searches etc and presents them to the buyer's on a plate just for checking, and that he wants to complete in 4 weeks but get a signed contract *tomorrow*, take it or leave it, he'll probably take it.

In my case there is a reasonable chance of that magical event "completion by Christmas". But given that removals, utilities companies and deliveries from furniture/household goods stores may be disrupted at Xmas, it may be better for me to wait until the New Year.

Bruce

In practice the signed forms are held by the solicitors and the finalising of the contract is verbally made by the solicitor by phone on your behalf. Essentially the phone calls go up the chain to buy and then another set of calls from top to bottom to sell. Or is it the other way round? Either way all can be certain that the chain hasn't broken in the "signing" process.

"Ronald Raygun" wrote

Agreed.

"Ronald Raygun" wrote

AIUI, it was just a few days later - but a number of days before exchange!

"Ronald Raygun" wrote

As I understood it (please explain if this is wrong!), the two sides usually sign separate contracts (different pieces of paper). At "exchange", these are all passed around the solicitors (quite probably by fax) so that both solicitors know that both buyer & seller have signed.

As the solicitors act for their respective clients, they only "exchange" their contract when the client agrees - but the client (each one) may have signed their contract & lodged it with their solicitor at any time before "exchange".

Now, suppose both parties have actually signed - but then (before "exchange" has occurred), one of them 'phones up their solicitor and says "don't exchange!!". The contract cannot be binding yet, as the solicitor hasn't let it out of his/her possession - and they will, of course, act on your instructions (as you are the client!) and destroy the contract which you had signed.

So - just because the two contracts have been signed, it does not make them binding - or does it?

I think that you will find than an on the same day (not simultaneous) exchange and completion for a 'chain' is extreamly rare. The difficulty of funding the deposit (or not) is small beer compared to the option of having half a dozen people: packed, loaded into a van and all ready to move out at a specific time, on a specific date when they only get half a day's notice that the day in question is going to be "today". The gap between exchange and completion is needed by almost all people to organise their move. You cannot plan your move until you have a date cast in stone by the exchange and IME exchange is delayed (relative to what at least one party expected) in more than 50% of sales.

A same day exchange and completion is mostly found only where the single mover, not selling a house, moves into an already empty house.

tim

I don't know how the crazy English do it but up here in S-land (S for Scot or S for Sensible), there are no actual pieces of paper bearing clients' signatures which form part of the contract.

The solicitor has the client's authority to make binding commitments on his behalf. The "contract" as such is simply the sum total of all the documents of offers and counter-offers and conditional acceptances which shuttle back and forth until one side unconditionally accepts the other's most recent set of conditions. At that moment the contract exists for the first time and is irrevocable except by mutual consent.

Well, as there is no actual contract signed by the client, that can't happen here, but of course the solicitor will consult with his client prior to sending off each document. Also each offer is capable of being withdrawn before it is accepted, even if it has already been sent by your solicitor to the other side's solicitor. Therefore a client *can* ring up his solicitor and instruct him to withdraw the latest missive to put things on hold, and so long as the other side's acceptance doesn't turn up in his fax machine before he gets on the blower to them, the stalling should be effective.