Conveyancing Advice Part 4: Exchange of Contracts

This is our Conveyancing Advice series, where we’ve been talking about the involved process that is selling a house, the necessary documentation, and how a Conveyancer will help guide proceedings. In this, the final part, we’re talking about the end stages of a house sale and the responsibilities of everyone involved.

It is important to understand that this is not a comprehensive guide; we highly recommend that you consult with our solicitors when dealing with any legal matters in conveyancing.

Conveyancing advice series

Part 1: Providing proof of funds
Part 2: What does a conveyancer do?
Part 3: How long does a house sale take to complete?
Part 4: Exchange of contracts between buyers and sellers

Exchange of contracts between buyers and sellers

Once your transaction is ready to exchange and a completion date has been agreed, the conveyancers for both parties will prepare files for the next stage.

For the Seller, this will mean applying for an up-to-date redemption statement from their lender showing the amount to redeem the loan on the day of completion. Sometimes, there is an early repayment charge if they are redeeming the charge before the expiry of their fixed loan period. The conveyancer will then prepare a completion statement and invoice showing the sale proceeds due back to the Seller. This will show the deduction of the conveyancer’s fees, agent’s fees, mortgage redemption and any other payments agreed.

For the Buyer, their conveyancer will apply for the mortgage funds to be released to them on the day before completion is scheduled. They will request any balance due from the Buyer. This is to ensure that on the day of completion all monies are received, and ready-for-purchase funds are transferred to the Seller’s conveyancer as early as possible.

On exchange of contracts, the Buyer will be required to pay a deposit of 10% of the purchase price to the Seller’s Conveyancer, as protection against any default. If the Buyer cannot afford to pay a 10% deposit, it may be that the Sellers Conveyancers may accept a lower deposit. However, if you default on the contract after the exchange, you will be required to make up the difference.

Transaction completion

Once the exchange of contracts occurs, the Buyer is officially the legal owner of that house; lenders require that they have arranged for house insurance from the date of that exchange. This is because, once they have entered into the contract, they are legally bound to complete on the purchase – even if something happens to the property meaning that they cannot move into it immediately. The buyer can then claim on your insurance for repair/reinstatement work and for other expenses.

So, on the completion day, purchase funds are transferred to the Seller’s conveyancer. Once the Seller’s conveyancer has received the funds, they will advise the Agents acting that they can now release the keys. They will then contact the Buyer’s conveyancer to advise that the funds have been received and that the Buyers can now collect the keys. This is the point that completion has legally taken place and legal ownership has transferred to the Buyer. The Seller’s conveyancer will also transfer the monies to redeem the mortgage to the lender.

We cannot give a specific time as to when the transaction will complete due to its reliance on external factors. However, as a guide, completion usually occurs around lunchtime/early afternoon.

Registering ownership

After completion, the Buyer’s conveyancer will apply to the Land Registry to change the register, recording the Buyer as the registered proprietor; however, legal paperwork must first be received from the Seller’s Conveyancer before the application can be submitted. Once this is done, the Land Registry will check the paperwork and ensure that everything is in order to amend the Title, including that the mortgage has been redeemed and the registered charge has been removed. This can take a few weeks on a straightforward transaction.

If the property is unregistered, all the original deeds will be sent to the Land Registry, who will then register the property on their system and allocate a unique number. This can take longer to register, as the deeds will need to be checked, and a summary of the rights and legal promises affecting the title will need to be reviewed and noted against the electronic title.

Get expert conveyancing advice

This Conveyancing Advice series has set out to explain just some of the numerous things that buyers and sellers have to consider over the course of a sale. The process may seem daunting, but as experts in the field we are committed to making the process as simple and stress-free as possible for our clients.

We offer a fixed-price conveyancing quote, so you don’t need to worry about the costs piling up with hidden fees. Contact our Conveyancing team to learn more:

Get a quote now

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