The final stage of buying a property is perhaps the most nerve-racking part of the process. You have probably spent a number of months searching for a property, negotiating the price and securing a mortgage. Your heart is now set on that property becoming your new home and every part of you is willing for the transfer of ownership to go smoothly. This article should help you understand the process and highlight what to look out for during the contract exchange and completion of the sale.
Before you exchange contracts you must understand that once they have been exchanged both parties are legally bound to complete the property transaction. Fundamentally, from the moment the contracts are exchanged the conditions of the property transaction cannot be changed without formally agreeing any changes with the other party. Additionally, neither party can pull out of the transaction; if the buyer pulls out they will lose their deposit and if the seller pulls out the buyer can sue.
Therefore, it is vital that you and your property conveyancer carefully check all the legal documents and make sure that you have had your property survey completed, any required maintenance has been completed by the seller, your mortgage provider has formally agreed to lend you the money to buy the property and you have enough money to pay the agreed deposit.
After the contracts have been agreed, your property conveyancer will request that you sign the contracts, whilst the seller will sign the contract separately. The contracts are then exchanged by each party’s property conveyancer and it is at this point that the deal becomes legally binding. In addition to the contracts being exchanged your deposit will also be transferred to the seller’s property conveyancer and it remains with them until the completion date. The deposit is finally paid to the seller along with the rest of the property’s valuation on the completion date.
Once the contracts have been exchanged you have to complete the property transaction even if the building burns down. From the date of the contract exchange you are usually legally responsible for the building’s insurance and therefore you must ensure you have building insurance in place from the date the contracts are exchanged. This can usually be organised by your property conveyancer.
Once the contracts have been exchanged you should know when the completion date is. It is usually between 1 and 4 weeks after the exchange, but it can also be as soon as the following day, depending on what you and the seller have agreed. Prior to completing the transaction and moving in you should contact utilities services so that the gas and electricity bills are in your name, you should inform notable contacts of your new address (such as banks, your home contents insurance provider, family and friends) and you should make appropriate moving arrangements for your possessions.
On the agreed completion date you become the legal owner of the property and you will usually receive the keys from the seller’s property conveyancer, but it is possible to arrange for the keys to be collected from the estate agent or directly from the seller. This is also when the seller receives the money for the sale and you pay any outstanding costs associated with the purchase.
At Rollingsons our residential property services covers all aspects of transferring property ownership. For more information about buying a property, please read our online guide to buying property or to arrange an initial consultation, please contact us on 0207 7611 4848.