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In a property sale or purchase, exchange of contracts is when the transaction becomes legally binding. The date for completion is set and following exchange, arrangements can be finalised for moving day.

We take a look at how exchange of contracts takes place if you are selling and buying a property simultaneously.

Getting ready for exchange of contracts

It is often the case that people sell and buy property at the same time. This means that there could be a chain of buyers and sellers several links long. Exchange of contracts will only take place once everyone in the chain is ready to proceed.

To be ready, everyone needs to have all of the information they need and be happy to go ahead. This includes search results, replies to enquiries, planning documentation, survey results and a mortgage offer.

If there is a lengthy chain, matters are more likely to proceed slowly as there are more people who need to a position to exchange.

Once everyone is able to go ahead, the solicitors and estate agents will liaise to agree on a date for completion. This is often a week or two after the exchange of contracts, which gives the solicitors a window to carry out the final checks and order the mortgage advance and allows those moving time to pack and make the necessary arrangements.

Exchange of contracts in a simultaneous property sale and purchase

Exchange of contracts takes place over the phone and is dealt with by the solicitors for each party. Where a sale and a purchase are taking place simultaneously, the solicitor will obtain a contract release on one transaction. This means that the other side confirms that they will exchange contracts when required to do so, generally by close of business on the day of release.

The solicitor is then free to exchange contracts on the other transaction, knowing that they can also exchange on the first transaction. While this may sound complicated, it is standard practice and is the way in which all simultaneous sales and purchases are dealt with.

Completion of a property sale and completion at the same time

Once contracts have been exchanged, your solicitor will confirm to you that this has been done. You will be able to make arrangements to move on the agreed date, and your solicitor will ask your new lender to send mortgage funds in time for completion. They will also obtain an accurate redemption statement for any existing mortgage, calculated to the date of completion. You will need to let your solicitor have cleared funds if any balance is needed from you.

On the date of completion, you should give the keys to your old property to your estate agent once you have vacated. Your solicitor will telephone you to confirm once the completion of your sale and purchase has taken place.

You can then liaise with your seller’s estate agent to pick up the keys. Keys are released once the solicitor confirms to the estate agent that the money has been received.

For further advice or information please contact one of our Residential Property experts.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.