How Long Between Exchange and Completion? Homeowners Hub (Conveyancing)

How Long Between
Exchange and Completion?
How Long Between Exchange and Completion

Contents

You can expect to wait between 1 day and 3 weeks between exchange and completion.

However, in some circumstances, buyers and sellers agree to exchange and complete on the same day or wait longer – sometimes even months.

Either way, if you have just exchanged contracts (or about to) on a house sale, congratulations!

Now that the conveyancing process is nearly complete, things are nearly ready for the move.

However, whilst the chances of things falling through at this stage are very slim, there are still a number of steps that need to be followed.

Whether you’re buying or selling, your conveyancer and estate agent should be chasing things up on your behalf to make sure exchange and completion can go smoothly.

Has Exchange of Contracts Secured Your House Sale?

The short answer is yes.

Exchange of contracts effectively means that the house sale has become legally binding.  In other words, the buyer will buy and the seller will sell.

The process involves a phone call between the conveyancers where they read out the contracts to each other to make sure they’re identical.

If there is a property chain involved, all the parties will have to be in agreement for the exchange to happen before the conveyancers can collectively move forward.

The buyer(s) would have also paid a deposit (typically 10%) at the point of exchange.

What Would Happen if Either Party Pulls Out at This Stage?

If the buyer decides to pull out, not only would the seller potentially be able to keep the 10% but can also sue for breach of contract.  The buyer can then end up liable for interest on the unpaid purchase price, conveyancing fees or additional costs.

If the seller pulls out, on the other hand, the buyer can sue for compensation on costs and interest on the deposit paid.

In short, there will be financial penalties if either party decides to withdraw from the sale.

How Long Between Exchange of Contracts and Completion?

The conveyancers will communicate with each other to discuss a completion date.

Most buyers and sellers simply want to get on with things.  However, time may be needed to make sure everything is ready for the move.  Both will need to organise removal vans, cleaners, decorators and storage arrangements.

Crucially, if the buyer is using a mortgage, the conveyancers also typically need around 5 days (1 working week) to draw down the funds and forward the Certificate of Title.

The buyer’s conveyancer can check the mortgage lender’s protocols and confirm the time required here.  Sometimes it can be quicker, but conveyancers are unlikely to bring things forward.

The conveyancers we work with through our estate agency usually suggest a few extra days to deal with any other pending issues.

Others may suggest longer, but we generally like to get things dealt with in the shortest time possible.

However, the overall period sometimes stretches out if completion has been delayed for specific reasons (see below).

Note that, once a completion date is agreed, the conveyancers have a legal obligation to stick to the deadline.  For this reason, it’s very rare for the sale not to complete on the set date.

Can The Sale Exchange and Complete on the Same Day?

Yes, it’s entirely possible.

However, a simultaneous exchange and completion requires the conveyancers to be extremely proactive.

We often see this happen when the property is empty and the seller is already living elsewhere.

Similarly, where the chain is simple and there are no extra parties involved, exchanging and completing on the same day can make sense.  It’s common with tenanted property sales, for example.

Property Solvers’ we buy any house service also exchanges and completes on properties on the same day as our clients often want to get things done in the quickest time possible.  As we do not use mortgages, we bypass the prolonged conventional sales processes.

Note that the buyer would still need to pay the 10% minimum deposit a day or two before (not on the date of completion).  This is so the conveyancer has everything organised in good timing.

Some mortgage companies also insist on a minimum period between exchange and completion (meaning a same day exchange and completion wouldn’t be possible).  The buyer’s conveyancer will be able to advise if this is the case.

It wouldn’t be possible to exchange and complete on the same day if the buyer is using a Help to Buy ISA.  Time is needed after exchange for the funds to be transferred over to the conveyancer.

Avoiding Redirection of Funds Fraud

On another note, some conveyancers may be reluctant to exchange and complete on the same day out of fear of what’s known as ‘redirection of funds fraud’.

Although the legal technology has generally caught up with this, there are hackers that intercept computer systems and fraudulently divert funds to false accounts.

Some conveyancers claim that making sure that things are done without any rush minimises the risk of this happening.

Delayed Completion

There are instances where the buyer and seller mutually agree to delay completion.

In certain circumstances, both know that the property sale is secure but need some time before moving in and paying the difference between the purchase price and the deposit.

Below are some of the reasons that would potentially justify a delayed completion:

  • Perhaps the buyer is moving from abroad and the seller needs time to vacate the property (or vice versa);
  • Both the buyers and seller will be away or have other personal issues to deal with before completion;
  • Usually with larger purchases, the buyer may be waiting for funds to arrive from a specific source (such as a sale of a property, business or another asset).  It’s sometimes mutually agreed that completion can be pushed forward until the funds are firmly in place;
  • If the property is particularly large and a move over a few weeks wouldn’t be logistically feasible;
  • The property is still being built or refurbished.  For example, it’s common for new build developers to exchange houses ‘off-plan’ with the buyer.  Although the developer may choose to add in a degree of flexibility, a provisional completion date is then agreed;
  • Part-exchange house schemes with homebuilders may stipulate a delayed completion at the point at which the new build unit is ready to move into.

Property Solvers Exchange with Delayed Completion (Assisted Sale)

Here at Property Solvers, we have an assisted sale service – typically for houses that need extensive refurbishment.

We effectively agree to exchange on the property and then fund the costs of the works.  We then sell the property on the open market and our client completes the sale at a much higher value.

In these cases, the completion can get delayed for anything up to a year (sometimes even more).

What is the Best Day to Complete a House Sale?

The day a house sale completes can be whatever is agreed between the buyer and the seller.

Generally, most sales complete on a Friday.  As people are often working and have other weekday commitments, this gives them chance to organise the move over the weekend.

One disadvantage is that removal companies tend to be booked up more over the weekend which tends to mean they’ll charge more.

Another is that lenders tend to get inundated with mortgage drawdown requests on Friday’s.

If there are any delays or issues, completion may have to wait.  This would be a problem if either the buyer or the seller has organised the move and then has to wait until the subsequent Monday.  Note that it’s rarely possible to complete at weekends.

For these reasons, we’d suggest trying to complete earlier in the week where possible.

What Happens At Completion?

You should receive a phone call or email from the conveyancer confirming things.

Money is transferred between the conveyancer’s clients accounts (typically using CHAPS) – a process that can take a little while if there is a chain.

However, good conveyancing firms should have experience in dealing with this so there’s usually no need to worry here.

The buyer’s conveyancer will need to check that the full funds (i.e. the mortgage and/or cash + the deposit) have been received by the seller’s conveyancer.  The buyer can only go and pick up the keys once this is confirmed.

The seller’s conveyancer will need to confirm that any outstanding mortgage and secured debts are cleared.

The proceeds of sale, minus all the costs, can then be transferred over.  The seller or estate agent should only hand the keys over once this is done.

What Happens if the Buyer or Seller Doesn’t Complete After Exchange?

Pulling out of a sale after exchange hardly ever happens.

However – if it does – be prepared for a lot of stress, intense phone calls and legal enforcement.

As mentioned above, the other party is fully entitled to seek compensation and damages and will have a strong case (due to a clear breach of contract).

It’s worth noting that there are no insurance policies that cover the 10% deposit paid by the buyer.

Depending on the terms of the agreements in place, there may be further action taken for legal and/or estate agency fees also.