What Is The Exchange Of Contracts?

The house buying process is made up of several steps from the decision to look for a new house, to checking property listings, making a conditional offer, organising conveyancing checks and paperwork before the final official step where the deposit is paid and the contracts are exchanged.

With a growing demand for property noticed by estate agents in Hull over the past two years, a growing number of people are taking part in the property buying process.

One particular step that is often a point of confusion or contention is the exchange of contracts, which is the point of no return for sales from a legal and financial standpoint.

It is the point where the buyer signs a contract that has been drafted agreeing to buy the house, the seller does the same and the contracts are “exchanged” by the conveyancers, the deposit is paid and there is no backing out of the contract.

Before this happens, nearly the entire buying process will have been carried out, including:

  • The lender’s valuation of the house,
  • The lender providing a mortgage offer,
  • An agreement on what is part of the buy offer, especially when it concerns furniture, fixtures and fittings,
  • Your deposit has been handed over to your solicitor, who will transfer it across,
  • You arrange adequate buildings insurance for the new house,
  • Your side of the contract has been drafted, finalised and signed.

Whilst all of the steps needed to facilitate the exchange of contracts can take up to three months (or more during busy housing markets), the actual exchange process can be as quick as a phone call between the solicitors that represent the buyer and seller.

After the contracts have been exchanged, the buyer will be given a moving in date, and it is time to think about removal companies, checking the property’s leasehold status and ensuring that the new details have been registered with the land registry.

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