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Exchanging Contracts

These are the last stages in the legal process.  Exchanging contracts means that the buyer and the seller are both legally committed to the sale.  When the buyer and seller are happy with its contents, they sign final copies of the contract and send them to each other.  This is called the exchange of contracts.  Once contracts are exchanged, the agreement to sell and buy is legally binding and usually neither party can pull out without paying compensation.

1. Preparing for exchange of contracts

• Once your conveyancer has all the details they need, they will send you a pre-contract report and a copy of the registered title.
• If you are happy with everything, you need to approve the contract by signing it.

2. Exchange

• Your conveyancer and the seller’s conveyancer will swap or ‘exchange’ contracts.
• Your conveyancer will transfer your deposit to the seller’s solicitor and arrange a date of completion.
• If you pull out at this point, you could lose your deposit.

3. Preparing for completion

Ask your conveyancer what you need to do and when. Your conveyancer will:

• Check with the Land Registry to make sure the title of the property is OK.
• Prepare the Transfer Deed to transfer ownership
• Make the final arrangements for payment, including drawing down the mortgage funds for you.
• Prepare final accounts for you including details of any further money needed from you to complete.
• Once you have exchanged contracts, you are responsible for the property’s building insurance.
• Make sure you are covered in case anything happens before completion.