How long does it take to exchange contracts?
Exchanging contracts is the exciting bit. It’s when both the buyer and seller sign identical contracts on the sale of a property and when the sale/purchase becomes legally binding. In other words, it’s only once you’ve exchanged contracts that either side has a legal obligation to buy or sell – and when you can really start planning life in your new home.
Here’s everything you need to know about the process, from how long it takes to exchange contracts to when it typically happens.
So, how long does it take to exchange contracts?
The average time to exchange contracts is between 8 and 12 weeks, while part exchange can be much quicker as there’s no chain. If you’d like to know more about that, find out more information here.
Every sale is different, though, and some can move quicker or take longer – but you can use that time frame as a guide.
What do I need to do before exchanging contracts?
When you exchange contracts, you’re entering into a legal agreement with an obligation to buy or sell – so it’s crucial to make sure nothing can go wrong. Only exchange once you’ve done the following ten things:
- Agreed on an offer, including for fixtures and fittings
- Had the mortgage valuation and conducted any surveys
- Received a formal mortgage offer in writing
- Arranged funding for the deposit
- Conducted the relevant searches through your solicitor
- Organised buildings insurance
- Settled on a date of completion for the sale
- Read and understood the contract
- Provided proof of funds or deposit to solicitor
- Signed the following documents:
- Agreement or contract
- Transfer or lease
- Mortgage deeds
When do you exchange contracts?
It’s entirely dependent on the chain, but the exchange of contracts is usually done between seven and 28 days before completion – although it is possible to do it on the same day. Normally, this happens around midday on a weekday.
That all being said, it is possible to exchange contracts and then have a longer wait for the completion. This happens when there’s no buyer for a property being sold. Remember: most mortgage offers are only valid for 6 months, so the wait for a buyer can’t be longer than that.
Is there anything that can cause delays?
Unfortunately, there are many factors that can cause delays and lengthen the time it takes to exchange contracts. These include:
The size of the chain
For people moving into older homes, this can be one of the biggest issues. You may be a first-time buyer and happy to move as soon as possible, but the seller will also have to find their next property. Once they’ve done this, a completion date will be set that suits others further up the chain too. You won’t exchange contracts until you’ve agreed a completion date, which means it can sometimes become a long, drawn-out process.
New-build properties aren’t part of a chain, though – so in those cases, the only wait is for the property to be built.
Waiting to receive a mortgage offer
You might have received a mortgage in principle, allowing you to make the purchase offer. But you can’t exchange until you have a formal mortgage offer from a provider. If there are any problems with your application, this can increase the time you’re waiting to exchange.
A difference in valuations
Once your mortgage provider has the property valued, there’s no guarantee it will match up to the price you agreed to pay. For instance, if the lender values the property at a price lower than you’ve agreed to pay, then they will only lend if you buy at the lower price. Unforeseen issues like this can take longer to resolve.
Delays in conducting the searches
When you agree to buy a property, your solicitor will undertake several searches – including Local Authority, Environmental, Water Authority, Chancel Repair, and Location specific. A Local Authority search can take up to six weeks, which could potentially delay exchanging contracts. Plus, if anything unexpected is revealed by the searches that could impact the purchase, this may also have a knock-on effect.
How are contracts exchanged?
Contracts are exchanged by solicitors representing both the buyer and seller. They both read the contracts in unison over the phone to check they’re identical, then immediately post them to each other. The completion date is also finalised in the exchange call and, once all this has happened, you’re in a legally binding contract to buy the property.
Despite agreeing on the date, there may still be delays on the day. If you’re involved in a chain, it will only happen if and when everyone in the chain is set to go ahead. If someone pulls out at the last minute, this will trickle down and could impact your exchange.
What should I do once the contract exchange happens?
- Insure your new property on risk from exchange
- Visit the property with your estate agent to ensure everything you agreed is still in place and nothing has been damaged
- Send a copy of the title deeds to your mortgage lender
- Register the transfer of ownership with the Land Registry
- Contact your banks and utility companies
Waiting for contracts to be exchanged can be extremely frustrating at times, but it’s always vital to make sure everything is in place before you legally agree to buy any property.
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