Buying a home at today’s market prices is a matter of urgency. If a home buyer or property owner doesn’t close a deal soon, there’s a huge risk of financial consequences. For the buyer, there’s a high chance that property and loan rates will only get higher due to the worldwide pandemic. On the other hand, the seller needs to consider the overhead costs of keeping a property on-hand during economic uncertainty.
The Importance of Working with Real Estate Experts
Selling a home will be incredibly difficult to do by yourself. Even self-made property sellers need to consult with different real estate experts to simplify their job. This is why it’s vital to have specialists by your side to double-check your actions and paperwork.
A vital companion you need to close a deal with a property buyer or seller is a conveyancer. Their role is to handle and double-check your documents and ensure that all legal and financial obligations are followed during an exchange. This is when both parties agree on the terms of the purchase, from the mortgage loan to the completion date. It’s a vital part of the home buying process that secures your property while keeping everyone liable for their respective responsibilities regarding the sale.
The Value of Exchange When Buying or Selling a Home
An exchange is an agreed-upon interaction between property sellers and buyers’ parties. This makes both parties legally bound to complete the transaction of purchasing or selling a home. Non-compliance to this agreement can lead to financial consequences and legal penalties, depending on the offence.
Since it’s a vital turning point in a person’s home buying journey, it’s important to know what’s allowed or acceptable from this point onward. Naturally, unintentional mistakes or breaches in the contract will lead to harsh penalties. This is why all parties concerned should familiarise themselves with the exchange process.
If you’re unsure about the exchange process, we’ll answer five questions you may have about it:
1. How Does an Exchange Work?
Buyers and sellers set both parties to decide on the terms of the home’s purchase. This doesn’t just include the set price of the property but also in confirming building insurance and other fees. They will then have 2-4 weeks before setting a completion date.
The completion date will be where the seller hands over the title of deed and keys to the property. On the other hand, the buyer will then have to show proof of payment by transferring the agreed-upon capital to the seller’s account.
2. Can Building Work Occur Between Exchange and Completion Dates?
Altering the property while it’s currently vacant is possible through a side legal agreement. Both parties need to agree that it’s a “key undertaking” that comprises refurbishing or repairing a home. This usually applies if the buyer’s mortgage lender has provided provisions demanding remedial work around the property before granting the loan. It will give access to the buyer to make changes around the property to required works as part of progressing the sale.
Although people traditionally set completion dates on a Friday, more people are moving toward setting it at any workday. This is because the delay of bank transfers can be an issue for confirming payment over the weekend.
3. Is an Attended Exchange of Contracts Mandatory?
An attended exchange of contract is the traditional method of performing an exchange. This is usually a meetup between the property owner and buyer to swap documents and confirm the terms of sale. However, not all property buyers and sellers can attend these engagements in person. This is why having a representative through their conveyancer is easier for everyone.
It’s only common for the property buyers and sellers to appear themselves if the property in question is high-value real estate. Doing a meetup in person may also clarify different clauses or specifics in the term to avoid back and forths with a conveyancer. Additionally, it shows a positive image for the buyer to meet their seller, especially if it’s to foster a long-term relationship In buying properties in the future.
Keep in mind that meeting in person is a more expensive endeavour. Besides the logistical issue of an attended exchange of contracts, you’ll need to pay for a higher rate with your convincer. For this reason, you need to be wary of your expenses and consider the nature of meeting your seller or their representative in person.
4. What Happens If I Opt Out of a Contract After an Exchange?
An exchange is a necessary safety precaution for both parties in the home buying process. There will be various consequences if either party attempts to opt out of a contract after an exchange.
Buyers will have to forfeit their deposit, which is an added deposit in contrast to the deposit on the property’s price. Additionally, the buyer will be liable to pay interest on the completion fund’s balance.
Sellers are affected differently once they decide to decline a buyer. They will have to cover the costs incurred for the transaction that will no longer push through. This includes conveyancing solicitor fees and even survey fees in assessing the house. While it’s not as financially punishing to buyers, some estate agents may be wary of your practices if you maintain this behaviour.
In some cases, buyers or sellers have no choice but to pull out of their contract. Mostly, it means a missing batch of paperwork or insufficient funds. This is why it’s vital to prepare for all these requirements before settling on an exchange and completion date.
5. Can I Schedule My Exchange and Completion on the Same Date?
The two-to-four-week leeway from the exchange to the completion date is considered enough time for all parties to settle their dues. While it’s possible to have an unofficial agreement of these requirements to be due on the same date, logistical reasons are at the root of avoiding this scheduling issue.
There’s no legal stipulation that exchange and completion dates need to be weeks apart. However, the realities of getting approval for certain paperwork and services are part of this extension. Part of the reason why exchanges and completion dates vary is due to the processing of different requirements. For example, organising mortgage paperwork, signing deeds, and scheduling removal services can take a long time.
Finally settling down on a property with a decent offer is a blessing to home buyers, which is why it’s vital to process every step and requirement smoothly. Similarly, sellers don’t want to ruin their chance of closing a sale at the right price. For these reasons, parties dabbling in the real estate market need to work with reliable conveyancers to settle and finalise their crucial documents and paperwork.
At Conveyancing Calculator, our conveyancing solicitors in Pembrokeshire can assist you through the ins and outs of selling or buying a property. With our team's years of industry experience, we can carefully and efficiently lessen your load when dealing with sales and purchases. Contact us and check our conveyancing quotations today!