When it comes to buying or selling a house, there are several steps that need to be taken before the keys are handed over. One of the most important parts of the process is the exchange of contracts. This is the point at which the sale becomes legally binding, and there are several things that happen at this stage.
Firstly, both the buyer and seller will have signed the contract, agreeing to the terms of the sale. These terms will include the purchase price, the completion date, and any conditions or contingencies that must be met before the sale can go through. The contract will also outline what happens if either party fails to meet their obligations.
Once the contracts have been exchanged, the buyer will typically pay a deposit, usually around 10% of the purchase price. This deposit is held by the seller’s solicitor until the completion date, at which point it will be deducted from the total purchase price.
The completion date is usually set for a few weeks after the exchange of contracts, giving both parties time to prepare for the move. On the completion date, the remaining balance of the purchase price is transferred from the buyer’s solicitor to the seller’s solicitor. Once this has been done, the property officially changes hands and the buyer becomes the new owner.
There are several other things that happen at the point of exchange. For example, the buyer’s solicitor will carry out searches to ensure there are no issues with the property, such as disputes over boundaries or planning permission. The seller’s solicitor will also provide the buyer with a copy of the title deeds, which prove ownership of the property.
One thing to be aware of is that once the contracts have been exchanged, both parties are legally bound to go ahead with the sale. If either party pulls out, they may be liable to pay damages to the other party, and could even be taken to court. It’s therefore important to make sure that all the terms of the sale are agreed upon before the contracts are exchanged.
In conclusion, the exchange of contracts is a crucial part of the house buying/selling process. It’s the point at which the sale becomes legally binding, and both parties are committed to seeing it through to completion. By understanding what happens at this stage, buyers and sellers can ensure a smooth transition to their new home.