The contract is the legally binding agreement to sell or purchase property and we need to ensure that you can perform the contract before we commit you to do so. We shall require your clear and unambiguous authorisation to exchange contracts.
We cannot advise you to exchange contracts in relation to a purchase until:
- We hold a contract signed by you.
- We have investigated the title to the property and are satisfied that it is a good marketable title.
- We are in receipt of all searches and they have produced satisfactory results.
- We are in receipt of your mortgage offer and we have checked that all conditions are satisfied.
If you are arranging buildings insurance independently of your Lender, that appropriate buildings insurance is in place.
We hold cleared funds for a deposit (assuming a deposit is being paid and you do not have a property to sell).
Everyone in the “chain” has agreed to exchange and has agreed to the completion date.
In relation to a sale:
- We hold a contract signed by you.
- We have checked that any mortgage that you hold over the property will be repaid from the proceeds of the sale.
- You are able to give vacant possession on the suggested completion date.
What deposit will I need to exchange contracts?
The standard form of contract which is recognised by all lawyers states that 10% of the purchase price is payable when an exchange of contracts takes place. The contract can be changed. If you are selling a property and buying another for a higher figure, it is often the case that the deposit given by your buyers can be used for your purchase. If you are not selling but buying with, say a 95% mortgage and able to offer a 5% deposit, this is often acceptable to a seller.
When do I need to arrange buildings insurance?
If your Lender is arranging buildings insurance as part of the mortgage offer – then you need not worry.
If you are buying a leasehold property, and insurance is undertaken by the Landlord, again you need to concern yourself. We will obtain details of this insurance.
If you are to insuring the property independently of your Lender, we suggest that you set up preliminary arrangements for buildings insurance as early as possible and let us have details of the proposed insurance company, their address and the reference policy number. We will need this information to check that the insurance you have arranged is satisfactory for your Lender.
We will advise you when to put the policy on risk – it will be either on the date we exchange of contracts or the date we complete.
When can I get the keys to the property?
Keys will not be released to you until the seller’s solicitors have received all of the purchase monies.
The purchase monies are transferred from one solicitor to another by Bank Telegraphic Transfer. The Bank Transfer may take minutes or it could take four hours to get through – it depends how busy the Bank Transfer system is on any one day.
Unfortunately, there is nothing we can do about the Bank Transfer system. We recommend that, if you know you are in the middle or at the end of a chain, aim to move in by mid to late afternoon.
Where do I collect the keys from?
If you viewed the property through Estate Agents, those Agents will hold the keys and will let you have them when the seller’s solicitors have informed the Agents that the purchase money has arrived.
If there are no Agents, you should liaise with the seller to arrange to collect the keys directly from them. No doubt, the seller’s solicitors will advise the seller when they are in receipt of the purchase money.
Please be aware that if you do pay a reduced deposit on exchange of contracts, and do not proceed to complete the purchase, that you are still liable for the remaining 5% deposit that you have not paid.
For more information about the final stage of buying a house (exchange contracts and collect the keys), please contact our Residential Conveyancing team on 01332 340 211.