What Can Hold Up Exchange of Contracts? Everything You Need to Know

’Exchanging contracts’ can be a confusing term and it denotes the end of a lengthy and often laborious procedure of purchasing, or selling, a property.

In this blog, I’m going to discuss how long it takes from an enquiry to the exchange of contracts, and how long between exchange and completion.

I will also look at what can hold up the exchange of contracts and what you can do to prevent delays.

But let’s start at the beginning – enquiries.

What are Property Enquiries?

Enquiries are done after the buyer’s solicitor receives the contract paperwork from the seller’s solicitor, as a standard part of the house buying process.

Once in possession of all the paperwork, the buyer’s solicitor can make specific enquiries regarding the documentation to ensure that any potential issues are dealt with.

Enquiries differ from property searches (also known as conveyancing searches). Have a look at our blog to learn more about property searches and how long they take.

When everything has been discussed and both parties are happy, the next step of the buying and selling process can commence – the exchange of contracts.

What is the Exchange of Contracts?

The exchange of contracts essentially means ‘the property transfer’ part – the point at which the deal is signed and sealed.

The buyer and seller’s solicitors verbally confirm with each other that they have all the legal documents required for the transaction to be complete, exchange contracts over the phone and double-check they match.

Once this has been finalised and both are satisfied, the transaction becomes legally binding and solicitors then post each other a hard copy of the contract.

For an exchange of contracts to take place the following documents need to be in place:

• A signed contract (which both the seller’s and buyer’s solicitors are in possession of)
• The buyer’s solicitor has to have the cleared deposit funds, the mortgage offer and building insurance policy (if needed)
• The seller’s solicitor needs to have the signed transfer of title deed
• A completion date must have been agreed (more about this later)

Following the exchange of contracts, if either party drops out of the transaction, they would encounter significant expenses and even face legal penalties. This should give you some assurance that the deal is very likely to go through.

What is Completion?

Completion is the last step in the buying and selling process.

The seller’s solicitor confirms they are in receipt of the full purchase monies, the ownership of the property is transferred from the seller to the buyer, and the buyer is given the keys to the property.

How Long From Enquiries to Exchange of Contracts?

In my experience, the time it takes from submitting enquiries to the exchange of contracts can vary greatly depending on a number of factors.

A quicker transaction can take a month or less. However, depending on the amount of enquiries it can take up to three months or even more.

In an ideal world, your solicitor will start the enquiries the moment you ask them to, to ensure the reports sent from the various authorities arrive at a similar time as your mortgage offer so the purchase can go ahead. This is just one of the reasons why I recommend hiring a reputable, trustworthy conveyancer.

How Long Between Exchange and Completion?

Usually, the exchange occurs roughly 7-28 days before completion. However, in some circumstances, it happens several months before.

On average, you should probably expect about two weeks between the time you exchange and your moving date. That said, there are some situations in which buyers and sellers decide to exchange and complete that very day or postpone longer – months, even.

Nevertheless, if you’ve recently exchanged contracts on a property (or will in the future), well done!

Now that the surveying procedure is almost complete, you’re nearly ready for moving day.

What Can Delay Exchange of Contracts?

When it comes to moving house, there’s no all-around solution to clarify why each individual’s exchange of contracts may be deferred, because every moving circumstance varies.

I want to make you aware of the most common reasons for a delayed exchange of contracts, so you know what to beware of and how to try to prevent it:

• Sluggish surveyors: as soon as a survey has taken place, the seller and buyer must wait for the results before continuing with the exchange of contracts. Surveyors are notoriously slow to deliver results, delaying the exchange of contracts.
• Unresolved enquiries: a solicitor won’t allow the process to continue if either party is disappointed with an answer received.
• Delay in redeeming monies: if a solicitor demands the monies from the lender late in the day, this will affect the time the lender can send the monies. If the seller’s solicitors fail to obtain the monies before 3pm, completion won’t occur on that day.
• Complex transactions: several transactions are made more complicated if they have incredibly lengthy chains or unique characteristics, leading to a possible delay in the exchange of contracts.
• Unhurried mortgage lenders: most buyers will require a house repayment to purchase a home. As such, they must have their house repayments set up in advance of the exchange of contracts. Thus, if a lender is taking too long to repay it will hinder the exchange of contracts.
• The purchase or seller: occasionally the buyer or seller interrupts the process. While this may not be deliberate, it will, inevitably, lead to a delay. In this case, the estate agent must act to accelerate the process.
• Hectic solicitors: typically, solicitors have numerous clients on the go simultaneously, meaning your home won’t always be Priority No.1.

Can the Exchange to Completion Time Be Accelerated?

I suggest the following to speed up the process:

• Constant contact: during the entire purchase or sale process, I can’t stress enough the importance of continual contact with your solicitor. This way, you stay in the loop about any developments and when you must take action and organise removals, for instance. Regular communication also enables you to give your seller or buyer a nudge to ensure they’re acting fast enough.
• Organise things ahead of time: plan as many arrangements as possible and give yourself plenty of time to do this. For example, organise a removal firm so they’re all set for the day, inform your estate agent about when you’ll be dropping the keys off and any other arrangements you can sort before the big day.
• Organise all your legal forms: sometimes a solicitor or external third party may be missing a specific form due to it being misplaced.
• Cash buyers are best: one of the primary causes of delays in the exchange of contracts process is the time involved in transferring monies from a house repayment. If you are lucky enough to have a cash buyer as an option this could speed up the time taken significantly.

Final Thoughts: What Can Hold Up Exchange of Contracts?

I hope that after reading this you now have a clearer idea of what can potentially hold up an exchange of contracts – from solicitors and surveyors to lenders and transactions – and what you can do to speed things up.

Should you have any lingering unresolved queries or simply want to talk about the process, be sure to contact us.

Want to discuss the advice on this blog - or anything else?