The final stage of buying a house: exchanging contracts and collecting the keys

The contract is the legally binding agreement to sell or purchase a property and we need to ensure that you can adhere to the terms and conditions of the contract before we commit you to do so. We shall require your clear and unambiguous authorisation to enable contracts to be exchanged.

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 cover is in place.
• We hold cleared funds for your 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 the completion date has been set.

In relation to a sale, contracts cannot be exchanged until:

• 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, however, this can vary.

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, for example, you are a first-time buyer and you do not have a property to sell, it is often acceptable to offer a 5% deposit, with the remaining money being funded by a 95% mortgage. However, if you do pay a reduced deposit upon exchanging the contracts and the sale subsequently fails to complete, you will still be liable to pay the remainder of the standard 10% deposit that was not originally paid.

When do I need to arrange buildings insurance?

If your lender is arranging buildings insurance as part of the mortgage offer, or you are buying a leasehold property and the insurance is being arranged by the landlord, they will manage the process for you and pass on the details of the insurance to us.

If you are 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 of the activation date for the insurance policy: it will be either on the date we exchange contracts or the date we complete the sale.

When can I get the keys to the property?

The 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 transfer. This may take minutes or it could take four hours to process, depending on how busy the system is on the day.

Unfortunately, the bank transfer system is beyond our control. From previous experience, if you know you are in the middle or at the end of a chain, you can aim to move in by mid to late afternoon.

Where do I collect the keys from?

If you viewed the property through estate agents, they will hold the keys and will let you have them when the seller’s solicitors have informed them that the purchase money has cleared.

If there are no agents involved, you should liaise with the seller to arrange to collect the keys directly from them. The seller’s solicitors will advise the seller when they are in receipt of the purchase money.