Exchange is one of the last hurdles between you and your new home. After exchange, the property is as good as yours – but it’s not a done-deal just yet.
This blog will cover everything you can expect to happen on the day you exchange and what you can do to make sure everything goes smoothly.
What happens at exchange?
Exchange is short for exchange of contracts. It’s basically when your solicitor and the seller’s solicitor send each other their clients’ signed copies of the documents that agree the sale.
They’ll typically read their copy of the contract over the phone first to make sure the two marry up.
As such, there isn’t a lot you have to do as a buyer to make the exchange happen – as long as you’ve signed the contracts as soon as possible.
The contracts lay out who is buying, who is selling, details about the property, the price it’s selling for and, importantly, the date of completion – which is when the house will belong to the new owner.
The important thing to know is that from the moment contracts are exchanged, you’re legally bound to go ahead with the purchase.
Exchange is also the point when you pay your deposit (your solicitor will do the actual transfer). If you were to pull out of the sale after this point, you could forfeit your deposit and leave yourself open to claims for other costs.
Since you’re legally bound to go through with buying the property after exchange, you’re usually also responsible for arranging buildings insurance from this point (the contracts will state if this isn’t the case).
Buildings insurance is critical because, as the mortgage holder, you owe the lender money. If the property were destroyed you’d still owe the money.
The insurance policy covers the rebuild cost of the property so that you’re not left with the bill for rebuilding as well as the mortgage if something happens to the property before you move in.
Buildings cover is usually a condition of your mortgage offer, meaning you can’t actually complete without it.
According to the Homeowners Alliance, you tend to complete between 7 and 28 days after exchanging contracts – although it is technically possible for both to happen on the same day.
However, before you exchange, you should make sure you’re happy that:
You’ve read and understood the contract You’ve agreed a completion date for the sale Your solicitor has completed searches You’ve had the valuation/surveys you wanted done You’ve arranged buildings insurance You have your deposit ready At Mojo Mortgage, we take care of the entire application for you – liaising with your solicitor and lender to make sure everything goes smoothly and as quickly as possible.
It all starts with a few simple questions here.