What needs to happen before Exchange of Contracts?
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Your conveyancer must complete various tasks before you can exchange contracts.
The conveyancing process in England & Wales is far from perfect. And, one particular pinch point for those trying to move is that either party (buyer or seller) can walk away from the deal at any point up to exchange of contracts. By this stage, both parties are likely to have spent an amount of money on the process, and invested time and emotional energy in it to.
So, what is it that needs to happen before exchange of contracts can happen? Who does what? And how long is it all likely to take?
For the purposes of this illustration, lets take for granted that the estate agents have done their bit. The deal is done. And (what is known as) the Memorandum of Sale is with the solicitors for both buyer and seller confirming that the sale is taking place, who the parties are, what the sale price is, and who the solicitors acting will be. This is then what needs to happen so that exchange of contracts can take place. Think of it as THE 6 STEPS TO EXCHANGE!
Step 1 – Onboarding
A boring formality but it needs to happen. Each solicitor will formally ‘engage’ their client which will need to include:-
- Terms of business – to be agreed and signed up to
- ID – strict rules surround money laundering regulations and the need for solicitors to be sure of the identity of their clients
At Qlaw, onboarding happens with the help of the very latest technology – and even includes biometric ID similar to the cutting edge facilities now used by internet banking apps.
This usually takes up to 1 week for both solicitors to sort this stage.
Step 2 – Contract Pack
This is something for the solicitors (not you) – although they will need your input. The Contract Pack is prepared by the seller’s solicitor, and is sent to the buyers solicitor once it is ready. It will include:-
Read more about the contract pack.
The Contract Pack is issued usually anything up to 3 weeks (ish) after the deal has been done.
Step 3 – Searches
This is again something for the solicitors (not you).
Having received the Contract Pack, the buyer’s solicitor will usually then order their ‘searches’. These are various reports they obtain to help them then ‘report’ to their client on the legal state of the property they wish to buy. The normal searches will include:-
- Local Authority – obtained from the council where the property is. It covers things such as planning, roadways, and regeneration areas.
- Water & Drainage – detailing how mains water and also sewers get to and from the property. It is provided by the water company that serves the area in question.
- Environmental – covering things such as flood risk, land contamination, and former uses (eg industrial.
Other searches may be undertaken depending on where in the country you are buying. For example, a mining search may well be done in Cornwall given historical tin mining.
As a very rough guide searches will cost around £350-400 all in, but this depends on the area you are buying in. Your solicitor will confirm this with you when you engage their services.
Searches can take anything from a couple of days to several weeks (local authority searches in particular).
Find out more about searches.
Step 4 – Mortgage
Right – this one is for YOU (not your solicitor)! It is for you to find, apply for, and secure your formal mortgage offer. Though your solicitor will ‘certify title’ to your lender before completion, the mortgage is very much your call. And, it must all be in place before exchange of contracts.
Read more about mortgages.
Step 5 – Survey
This is the other main ‘to-do’ for YOU (not your conveyancer). You engage your surveyor, and their report is for you (not part of the legal process).
Buying a house is very much ‘buyer beware’. Once you have exchanged contracts you are stuck with buying the house – so you MUST find out the state of the bricks and mortar before committing to the exchange of contracts.
A full building survey will give you a ‘warts and all’ experts view of what you are buying, and this type of survey will often also give guidance on the work needed to (and cost of) repairing any issues that the property has.
Read more about surveys.
Step 6 – Enquiries
And so, back to your solicitor with the final stage before exchange of contracts – the dreaded ‘pre contract enquiries’! This is a process whereby any queries or questions that arise out of all of the above can be put to the seller’s solicitor and must be replied to honestly and openly. If a seller tries to hide something that they know is an issue, it may be a breach of contract/misleading on their part resulting in legal action after completion.
The enquiries stage can be time consuming and frustrating for all concerned – even the conveyancers! What enquiries need to be raised depends entirely on the particular property.
Read more about enquiries.
Conveyancing enquiries are usually the final step before exchange of contracts.
So, to summarise, the following six steps need to be completed for exchange of contracts to take place:-
- Contract Pack
The buyer’s solicitor will ‘report to their client’ when they are happy on all of the above and exchange can then happen. HOWEVER, if you are in a chain, do bear in mind that you can generally only exchange once everyone else in the chain is also ready on all of their 6 key stages!
Exchange of Contracts!
The general rule of thumb for the 6 key stages to be completed is around 8-12 weeks. This is a very rough guide and your own sale/purchase will depend upon its particular circumstances, and of course any chain you are in.
But, with those key stages completed, exchange of contracts can happen. You will at this stage fix your completion date (the day of your actual move), and the buyer will pay a 10% deposit to the seller (which they will loose if they fail to complete).
In between Exchange and Completion
In between exchange and completion you can get everything booked – removals, time off work, new furniture and so on. Your solicitor will liaise with your mortgage company to be ready to receive the mortgage money, and they will send you a completion statement setting out the exact numbers of the sale and any purchase (including letting you know if they need any more from you).
For your solicitor, completion is a bit of a non event. The money is sent through the banking systems from one solicitor to the next, and once received by the seller’s solicitor that’s that. The solicitor will telephone the estate agent and instruct them to ‘release the keys’.
For you, completion day is (hopefully) fantastic as you wave goodbye to your old home, and say hello to your new one.
Want more information on Exchange of Contracts?
Check out the rest of our site which includes a whole bunch of great content on the whole conveyancing process. If you can’t find what you are looking for, do reach out to our team of expert conveyancing solicitors who are here to help!
Online Conveyancing Quote
Whether you are looking for a ‘conveyancer near me’, or an online conveyancing solicitor, check out our instant online conveyancing fee calculator. It will give you a full breakdown of what should be included in a conveyancing quote. This will include the disbursements such as Stamp Duty, Land Registry fees, and search fees. Things such as advising on joint ownership; enquiries; and contract pack are all part of your conveyancer fee, and won’t be listed separately in the quote.
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