If i’d have known the grief around the exchange of contracts before starting the house buying process, i’d be wondering how we’d ever get this far. But we did it, we exchanged contracts on our house this week – finally.
Nothing can describe the sheer feeling of dread when transferring your whole deposit via one bank transfer… followed by a hour or so of waiting for confirmation on whether the solicitors have received your savings, that you’ve given up a serious shopping habit to pull together. Once the solicitors have all your hard earned cash, you just wait, and wait, for what seems like a lifetime, before the almighty email confirmation that you’re soon to own a house.
After all of the initial admin that goes into house buying is complete, you’ll potentially feel at a point where you’re ready to exchange – but tread carefully, there’s a lot to factor in before then. Be prepared to speak to your estate agent more than you speak to your mum.
Prepping for the Exchange
When you’re in a place where you’re happy to go ahead with the purchase of the property, after the survey and mortgage is in place, and an allowance has been negotiated, then you’ll need to ask your solicitor to get all paperwork ready. They’ll report back to you on the searches they’ve pulled together in the run up to the sale, and provide you with a ‘property information form’ completed by the seller with all details of the property. This form will include all details of the property, including details on the utilities, window guarantees and providers, so that you can ensure you’re happy before proceeding. If not, then there’s still chance to negotiate a better deal.
This is where a good solicitor can make your life so much easier, or a bad one so much harder. If the solicitor doesn’t have everything ready to exchange when you need them, it can delay the purchase of a property, and anger the seller by affecting an onward chain. They can also help delay the process if needed, and assist in pushing for the completion date of your choice.
In the time leading up to our exchange, the estate agent threatened the house was going back on the market on a daily basis, but hold your ground – and remember it will take the seller longer to market the house from the beginning, than wait a couple of days for you to be happy with the conditions.
Choosing a completion date
In order to exchange contracts, you’ll need to work with your estate agent to choose a completion date for the property – the day you’ll get the keys. When looking at potential completion dates it’s good to think about your initial mortgage repayments, or dates you’ll need to do any work, in order to find a date that suits you. The completion date can be affected if the house you’re purchasing is in a chain, as it’s likely the onward purchase will need to be done on the same day. Once you’re happy with the date chosen, which can be anything from a few days, to a few months, away from the date of exchange, then you’ll need to notify your solicitor who will pick up conversations with the sellers solicitor to get everything in place.
Paying the deposit
The deposit on the house you’re buying is due on the day of exchange, and paid to the solicitor who arranges transfer to the vendor. Ensure your deposit money is with your solicitor ready for completion with time to spare if you can. Some banks have a limit on how much you can transfer out of your bank account in one day, so arrange to get all of the cash in the right place more than an hour before the solicitor needs the cash, the money is the simple bit – don’t let it be the hold up.
If you have a Help to Buy ISA, then your solicitor is responsible for claiming the reward you’ve earned from the government. The money from the reward needs to be used towards the purchase of your first property, so it’s best to discuss this with your solicitors around the date of exchange, and close the account ready for completion.
Once the contracts have been exchanged, you’re legally bound to buy the property, or risk losing your deposit (or 10% of the house price) so make sure you’re well informed and ready for the purchase at this point. At this point in the process, the only fees you’ll need to pay is the deposit money, with the solicitors fees and stamp duty due upon completion.
Now the countdown begins! The keys are due in just over two weeks, the ancient wallpaper is coming straight off the walls, and the slugs living on the carpet are getting evicted.