Buying property tips: Exchanging contracts
Exchanging contracts and setting a completion date is where all your hard work starts to pa off. Use this guide to help you through these final steps.
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You are contractually obliged to buy the property once contracts
are exchanged. |
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Your solicitor holds your deposit which you pay at the time
of exchange. |
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You will agree when the sale is to be completed and if this
is not honoured then penalties can be imposed. |
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The contracts are only exchanged when your solicitor has received
satisfactory replies to their questions. |
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Often your sale or purchase will be dependent on others buying
and selling properties - and that is called a chain. |
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If this is the case the solicitors must coordinate transactions
so that completion of your sale and purchase take place on the
same day. |
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Buildings insurance must be effective from the day of exchange
of contracts. |
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Otherwise you could be jointly liable with the previous owners
for any damage caused to the property after that date. |
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Once contracts are exchanged, you are expected to complete
the purchase even if the property is damaged. |
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If the purchaser dies, life cover will pay for the sale, safeguarding
dependents. |
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Make sure you also have protection for accident, sickness
and unemployment from the point of exchange of contracts. |
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Enhanced cover - at a price - comes from income protection
or critical illness insurance. |
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This is the official record at the Land Registry that you
are the new owner. |
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Your solicitor prepares the document before completion. |
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When the Transfer Deed is completed it is sent to the seller's
solicitor. |
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The process of completion involves handing over: keys, Land
Registry certificate, and Transfer Deed. |
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Your lender holds the documents, as security against the loan. |
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In return your solicitor is sent the 'mortgage' funds by the
lender to pay for the sale. |
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The law requires that the Transfer Deed is officially stamped. |
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The Government imposes a tax - stamp duty - on all properties
over £60,000. |
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This tax is paid by your solicitor and added to your bill.
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The stamped deed is then sent to the Land Registry to confirm
the new owner. |
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It also registers the lender's interest as the mortgage. |
Moving house is always a stressful time, even when things go smoothly.
Here are a few tips for what to do if a problem does arise.
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If you find a serious fault which was not known at the time
of purchase, you first need to check the scope of the survey
you commissioned. |
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A lender's survey simply verifies the loan for the lender-
you cannot rely on it to find serious structural problems. This
is why many purchasers, particularly of older properties, prefer
to pay for a more expensive independent survey. |
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If you fee your surveyor should have found the fault, then
raise the matter with the surveyor's firm concerned. They will
have an internal complaints procedure. |
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Your surveyor will be a member of the Royal Institute of Chartered
Surveyors, so you can also involve their arbitration scheme.
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If the worse happens and structural faults arise after you
have bought your home - consult the Citizens Advice Bureau or
a lawyer and sue. |
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You may have a complaint over service, charges or financial
loss. |
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Consult the complaints procedure provided by the Supervision
of Solicitors, the Law Society itself or the Council for Licensed
Conveyancers. |
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Make sure you use one registered with the British Association
of Removers. |
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Ensure you are fully insured - either through their insurance
or your own |
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Before commissioning one, check they are in the voluntary
Ombudsmen of Estate Agents scheme. Not everyone is but it helps. |
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As a seller, remember to ask family and friends about their
experience of local agents - do this before you sign any contract.
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Read any contract thoroughly before signing. |
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The 1991 Property Misdescriptions Act is designed to stop
incorrect or misleading descriptions. |
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New homes aEnsure you are fully insured - either through their
insurance or your ownre guaranteed for 10 years under schemes
run by the National Building Council or Zurich assurance (01252
522000). |
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They also offer an arbitration service to stop disputes escalating. |
At this stage of the home buying process the estate angent will be
working to liaise with solicitors, the seller and the buyer.
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You don't have to use an agent but you'll probably find selling
your home easier if you do. |
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Just remember that the agent is working for the seller and
is paid a fee based on the price you pay. |
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They are legally obliged to give an accurate description of
the property. |
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False or misleading information is a criminal offence and
you can report them to your local trading standards office. |
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If you are selling, check your contract carefully - particularly
any liabilities if you introduce a buyer direct. |
Useful links
Selling your home
First time buyers
Property news
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