Exhange of contracts to completion: time period


B

bruce phipps

I'm a first time house buyer, located in the North of England.
My house purchase is going very smoothly so far -- survey was OK,
mortgage offer has been processed OK, seller is not in a chain and can
vacate ASAP.
We are now coming up to exchange of contracts.
What is the usual length of time between exchange of contracts and
completion in England? Is 2 weeks OK in my situation?

Thanks
Bruce
 
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G

Geordie

bruce phipps said:
I'm a first time house buyer, located in the North of England.
My house purchase is going very smoothly so far -- survey was OK,
mortgage offer has been processed OK, seller is not in a chain and can
vacate ASAP.
We are now coming up to exchange of contracts.
What is the usual length of time between exchange of contracts and
completion in England? Is 2 weeks OK in my situation?

Thanks
Bruce
Exchange of contracts and completion are one and the same I believe.

Geordie
 
R

Ronald Raygun

Geordie said:
Exchange of contracts and completion are one and the same I believe.
Then you are mistaken.

Exchange is when the contracts are signed, when the agreement becomes
binding. All the eyes are crossed and the teas dotted.

Completion is when what was agreed in the contract is actually done,
i.e. when money and keys change hands.

Usually the contracts would state when completion is to occur. So if
you *have* exchanged, you should already know when completion is due.
Ask your solicitor.
 
T

Terry Harper

Geordie said:
Exchange of contracts and completion are one and the same I believe.
No they are not. Exchange of contracts can take place a considerable time
before the purchase is completed. In many cases they are simultaneous,
because of the inability of the chain of purchasers and sellers to fund the
required 10% deposit without selling their existing property.

I exchanged contracts on a new house, being built, about 5 months before
completion. Had I not done so, the developer would have withdrawn it from
sale and increased the price (in 1977-8).
 
E

Eric Jones

Geordie said:
Exchange of contracts and completion are one and the same I believe.

Geordie

Not quite. They can be done the same day with agreement of all parties but
it is normal practise to have between 2 and 6 weeks between exchanging and
completion. Once you have exchanged ensure that you have set up Buildings
insurance for he property you are buying.
Eric
 
A

AMO

Eric Jones said:
it is normal practise to have between 2 and 6 weeks between exchanging and
completion. Once you have exchanged ensure that you have set up Buildings
insurance for he property you are buying.
Eric
Be careful. You need to make sure all the paperwork can be done within the
time to Exchange contracts. For example, the buyer needs to get his
solicitors to perform a 'search' on the property to ensure that the land
belongs to you if you bought it and that there are no major new developments
that are going to happen that will devalue the property. This requrires
communication with the land registry and no matter how fast your solicitors
act, they cannot really speed up this part of the process. Therefore, its
not good to exchange contracts under 3 weeks unless you are sure that you
are able to perform this task speedily.

AMO
 
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C

Chris Blunt

I'm a first time house buyer, located in the North of England.
My house purchase is going very smoothly so far -- survey was OK,
mortgage offer has been processed OK, seller is not in a chain and can
vacate ASAP.
We are now coming up to exchange of contracts.
What is the usual length of time between exchange of contracts and
completion in England? Is 2 weeks OK in my situation?
2 weeks is normally about the minimum. We exchanged contracts on my
property on July 28th, with completion taking place on August 12th.

Chris
 
N

Neil Jones

2 weeks is normally about the minimum. We exchanged contracts on my
property on July 28th, with completion taking place on August 12th.

Chris
The minimum is nothing, or, in other words, exchange and completion on
the same day.

While traditionally there is a gap of 4 weeks or so between exchange and
completion, these days anything goes, so ask your solicitor.

Neil
 
T

Tumbleweed

AMO said:
Be careful. You need to make sure all the paperwork can be done within
the time to Exchange contracts. For example, the buyer needs to get his
solicitors to perform a 'search' on the property to ensure that the land
belongs to you if you bought it and that there are no major new
developments that are going to happen that will devalue the property.
This requrires communication with the land registry and no matter how fast
your solicitors act, they cannot really speed up this part of the process.
Therefore, its not good to exchange contracts under 3 weeks unless you are
sure that you are able to perform this task speedily.

AMO
That must be incorrect, you'd get searches etc done before exchanging,
since after exchanging you will lose your deposit if you decide not to
proceed (after finding a problem with a search)
 
N

NC

bruce said:
I'm a first time house buyer, located in the North of England.
My house purchase is going very smoothly so far -- survey was OK,
mortgage offer has been processed OK, seller is not in a chain and can
vacate ASAP.
We are now coming up to exchange of contracts.
What is the usual length of time between exchange of contracts and
completion in England? Is 2 weeks OK in my situation?

Thanks
Bruce
I was a first time buyer in October last year. We completed a week after
we exchanged contracts. I know of people who have done it on the same
day, and others who have had a 2 & 4 week gap. There is no set time - it
will change case by case. In your situation where there is no chain
involved at all (either up or down stream), I would suggest a week. That
way you have a week where you KNOW you are going to move and can
organise. If you try and do it on the same day, you could be ready to go
and there may be a delay - causing you to live out of boxes for a week
or so until it is sorted.
 
T

Tim

Geordie said:
Then you are mistaken.
Agreed!

Exchange is when the contracts are signed ...
Hmmm. I recently signed my contract the **week before** exchange (and
completion happened the same day as exchange).

There is no reason that exchange has to happen the same day as the contracts
are signed - indeed, contracts can be signed by the two parties on different
days!
 
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R

Ronald Raygun

Tim said:
Hmmm. I recently signed my contract the **week before** exchange (and
completion happened the same day as exchange).

There is no reason that exchange has to happen the same day as the
contracts are signed - indeed, contracts can be signed by the two parties
on different days!
But you alone could not create the contract. Presumably the other
party signed a week after you did. "Exchange is when the contracts
are signed" was supposed to be taken to mean when all the signing
has been done. It's really the last signature which pulls it all
together.
 
R

Ronald Raygun

Tumbleweed said:
That must be incorrect, you'd get searches etc done before exchanging,
since after exchanging you will lose your deposit if you decide not to
proceed (after finding a problem with a search)
Rubbish. There's no reason a contract cannot be phrased in such a way
that the deal's off if there's a problem with the search which the seller
cannot rectify at his own cost within a certain period.

Indeed, that is normal in Scotland, where for that reason plenty of time
is allowed between exchange (conclusion of missives) and completion (entry
date) to allow all the donkey work to be done. The advantage is that you
get the binding agreement much earlier.

There is no question of losing a deposit since none is given. The agreement
is binding and in extremis if a buyer drops out after concluded missives
he can remain liable for up to the full purchase price, more usually for the
additional cost of re-marketing and making up any shortfall in the next
price to be agreed, plus interest.
 
T

Tumbleweed

Ronald Raygun said:
Rubbish. There's no reason a contract cannot be phrased in such a way
that the deal's off if there's a problem with the search which the seller
cannot rectify at his own cost within a certain period.
There might be no reason *in theory* but AFAIK its not normal practice to do
that in England (I'll ignore your Scottish stuff since the original question
seemed to be related to English law.
 
R

Ronald Raygun

Tumbleweed said:
There might be no reason *in theory* but AFAIK its not normal practice to
do that in England (I'll ignore your Scottish stuff since the original
question seemed to be related to English law.
It did, yes, but it's not a matter of law so much as of practice, and
there is scope for intermingling some aspects of the two different
systems. For instance, the Scottish practice of prospective buyers
commissioning surveys prior to offering is waning. The trick is that
the buyer offers subject to survey, the seller accepts the offer subject
to the "subject to survey" condition being deleted, then the buyer
quickly organises a survey and then either pulls out, or agrees to
remove the condition provided the cost is reduced by £5k to pay for
dry rot treatment.

In the end, it's money talking. If some English chap is struggling
to find a buyer, and this canny Scot turns up and offers him as much
as he can hope to get provided the *seller's* solicitor does all the
hunting out of searches etc and presents them to the buyer's on a
plate just for checking, and that he wants to complete in 4 weeks
but get a signed contract *tomorrow*, take it or leave it, he'll
probably take it.
 
B

bruce phipps

I was a first time buyer in October last year. We completed a week after
we exchanged contracts. I know of people who have done it on the same
day, and others who have had a 2 & 4 week gap. There is no set time - it
will change case by case. In your situation where there is no chain
involved at all (either up or down stream), I would suggest a week. That
way you have a week where you KNOW you are going to move and can
organise. If you try and do it on the same day, you could be ready to go
and there may be a delay - causing you to live out of boxes for a week
or so until it is sorted.

In my case there is a reasonable chance of that magical event
"completion by Christmas".
But given that removals, utilities companies and deliveries from
furniture/household goods stores may be disrupted at Xmas, it may be
better for me to wait until the New Year.

Bruce
 
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T

Tim

But you alone could not create the contract.
Agreed.

Presumably the other party signed a week after you did.
AIUI, it was just a few days later - but a number of days before exchange!

"Exchange is when the contracts are signed"
was supposed to be taken to mean when
all the signing has been done. It's really
the last signature which pulls it all together.
As I understood it (please explain if this is wrong!), the two sides usually
sign separate contracts (different pieces of paper). At "exchange", these
are all passed around the solicitors (quite probably by fax) so that both
solicitors know that both buyer & seller have signed.

As the solicitors act for their respective clients, they only "exchange"
their contract when the client agrees - but the client (each one) may have
signed their contract & lodged it with their solicitor at any time before
"exchange".

Now, suppose both parties have actually signed - but then (before "exchange"
has occurred), one of them 'phones up their solicitor and says "don't
exchange!!". The contract cannot be binding yet, as the solicitor hasn't
let it out of his/her possession - and they will, of course, act on your
instructions (as you are the client!) and destroy the contract which you had
signed.

So - just because the two contracts have been signed, it does not make them
binding - or does it?
 
T

tim

Terry Harper said:
No they are not. Exchange of contracts can take place a considerable time
before the purchase is completed. In many cases they are simultaneous,
because of the inability of the chain of purchasers and sellers to fund
the
required 10% deposit without selling their existing property.
I think that you will find than an on the same day (not simultaneous)
exchange and completion for a 'chain' is extreamly rare. The
difficulty of funding the deposit (or not) is small beer compared
to the option of having half a dozen people: packed, loaded into
a van and all ready to move out at a specific time, on a specific
date when they only get half a day's notice that the day in question
is going to be "today". The gap between exchange and completion
is needed by almost all people to organise their move. You cannot
plan your move until you have a date cast in stone by the exchange
and IME exchange is delayed (relative to what at least one party
expected) in more than 50% of sales.

A same day exchange and completion is mostly found only
where the single mover, not selling a house, moves into an
already empty house.

tim
 
R

Ronald Raygun

Tim said:
As I understood it (please explain if this is wrong!), the two sides
usually
sign separate contracts (different pieces of paper). At "exchange", these
are all passed around the solicitors (quite probably by fax) so that both
solicitors know that both buyer & seller have signed.

As the solicitors act for their respective clients, they only "exchange"
their contract when the client agrees - but the client (each one) may have
signed their contract & lodged it with their solicitor at any time before
"exchange".
I don't know how the crazy English do it but up here in S-land (S for
Scot or S for Sensible), there are no actual pieces of paper bearing
clients' signatures which form part of the contract.

The solicitor has the client's authority to make binding commitments
on his behalf. The "contract" as such is simply the sum total of all
the documents of offers and counter-offers and conditional acceptances
which shuttle back and forth until one side unconditionally accepts the
other's most recent set of conditions. At that moment the contract
exists for the first time and is irrevocable except by mutual consent.
Now, suppose both parties have actually signed - but then (before
"exchange" has occurred), one of them 'phones up their solicitor and says
"don't
exchange!!". The contract cannot be binding yet, as the solicitor hasn't
let it out of his/her possession - and they will, of course, act on your
instructions (as you are the client!) and destroy the contract which you
had signed.
Well, as there is no actual contract signed by the client, that can't
happen here, but of course the solicitor will consult with his client
prior to sending off each document. Also each offer is capable of being
withdrawn before it is accepted, even if it has already been sent by
your solicitor to the other side's solicitor. Therefore a client *can*
ring up his solicitor and instruct him to withdraw the latest missive
to put things on hold, and so long as the other side's acceptance
doesn't turn up in his fax machine before he gets on the blower to
them, the stalling should be effective.
 
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R

Robert

.... you'd get searches etc done before exchanging,
since after exchanging you will lose your deposit if you decide not to
proceed (after finding a problem with a search)
Most searches are done before exchange but some (like bancruptcy
search) are done between exchange and completion. is this not so?

Robert
 

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