How to Speed up Exchange of Contracts: A Comprehensive Guide
Did you know that the average person will move house eight times during their life? Buying or selling a property can be an exciting journey, but it can also be time-consuming. A critical milestone in this process is the exchange of contracts, which makes the deal legally binding.
While the timeline for exchange and completion may vary, you can use several strategies and tips to speed up the exchange process. In this comprehensive guide, we will explore the top tips and show you how to speed up exchange of contracts.
What is Exchange of Contracts?
Let’s begin by understanding what the process entails before discussing how to speed up exchange of contracts.
Several tasks need completion before exchanging contracts, with responsibilities for both buyers and sellers. The support of a licensed conveyancer or solicitor is crucial. Both parties must collaboratively agree on certain tasks for the exchange to proceed.
Upon accepting an offer, the solicitors actively engage in legal tasks, checking property details and conducting essential searches. Simultaneously, the buyer secures a mortgage offer and provides the required documents while the seller addresses any raised enquiries.
Property searches may affect the price discussions. The requirement for indemnity insurance typically arises from missing or problematic paperwork and permissions, such as covenants, deed issues, and building regulations. Buyers often desire this insurance to shield them from potential costs related to enforcement actions. Who pays for the insurance depends on who has more negotiating power, but it is usually the seller.
Negotiations might also happen if the survey reveals structural or maintenance issues. The buyer may reduce their offer to cover repair costs, or the seller may agree to undertake the work before exchanging contracts. Structural issues are often the main reason for delays in exchanging contracts.
Both the seller and buyer must also complete a fixture and fittings form before exchanging contracts. This form specifies the items included in the property sale. The seller lists what fixtures (like built-in furniture) and fittings (like free-standing appliances) will stay in the property. The buyer states which optional items they want to purchase and how much they’re willing to pay.
How long does it take to exchange contracts?
Typically, it takes eight to twelve weeks to arrive at the stage where you are prepared to proceed with the contract exchange. However, several practical strategies can help expedite the process.
How to speed up exchange of contracts
To expedite the exchange of contracts, it is vital to collaborate effectively with all parties involved. This ensures that each buyer and seller can address their tasks, smoothing the progression of the exchange process. Regular communication between all parties is key.
Methods exist to expedite contract exchange for buyers and sellers, with some approaches proving beneficial for all parties.
Carefully select your solicitor
One of these is your choice of conveyancers or solicitors. When selecting a conveyancing service provider, it’s important to choose one that offers both speedy and quality service. The effectiveness of the service plays a crucial role in the pace of the conveyancing process. A slow solicitor can cause significant delays in a property sale.
Free up your schedule
Consider carefully before going on holiday during a transaction, as timing can be uncertain. Dealing with unexpected situations promptly is crucial to avoid inconvenience for all involved.
Make room for changes
Flexibility with completion dates can also facilitate a smoother exchange process. Exchanging contracts with a long stop completion allows the seller additional time to find and complete a new property. If they secure a new property sooner, you can adjust the completion date accordingly, providing a mutually beneficial arrangement.
Set firm boundaries
If you reach a point where delays become excessive, consider setting firm ultimatums on time frames. Get your estate agent or solicitor to ask for you, ensuring they do it professionally and objectively. Before taking action, it is essential to prepare for potential consequences. This includes having a backup plan in case the transaction falls through.
Advice for sellers
Organise your paperwork at the beginning of your sale or, preferably, when listing the property. This proactive effort results in time savings when the solicitors become involved.
1. Complete Forms As Quickly As Possible
At the start of the sale, your solicitor will send you forms to fill out and return. These include a property information form and a fittings and contents form. These documents are part of the contract sent to your buyer’s solicitor. They can address any questions faster with a full pack of information, so complete the forms as soon as possible.
2. Provide Supporting Paperwork
Minimise enquiries by submitting all supporting paperwork with the property information form. This includes any warranties and guarantees related to the property, such as a damp proofing guarantee. If you’ve made changes to the property, give copies of planning permissions, building regulation completion certificates, safety certificates, and installation certificates. Ensure properties under ten years old have an available new home warranty.
3. Vet Your Buyer
A cash buyer typically moves much faster than a buyer relying on the sale of their house. Evaluate the length of any chains you are entering and, if feasible, steer clear of longer ones.
4. Inform Tenants
If you are selling a buy-to-let property, ensuring a smooth transition with tenants is crucial. Start by reviewing the current tenancy agreement and its expiration date.
Inform tenants about the sale and discuss their plans for moving out. Coordinate with them on suitable times for property viewings, respecting their privacy and rights. Ideally, you should ensure they have vacated the property before the agreed completion date, getting written confirmation.
5. Contact Your Insurer
Before exchanging contracts, inform your insurance provider about your decision to sell the property. Buyers typically arrange home insurance from the day of exchange, so you should cancel your insurance from this date.
As you can see, having your paperwork in order and on hand plays a huge role in expediting the process of selling a property. Storing documents is a breeze with DocFlite, ensuring that essential papers are always within reach. Our platform provides speed, finesse, and unparalleled ease in document management, making property deals easier to navigate.
Advice for home buyers
1. Book a Survey
When buying a property, it is prudent to obtain a professional survey. This helps uncover any hidden issues with the property that you might not see during a regular viewing.
Most people opt for a Homebuyer’s report. If the property is old or constructed with unique materials, you may need a more thorough Building Survey. Choosing the right surveyor who specialises in the type of survey you require is crucial.
Schedule the survey at a time that suits the seller to ensure a thorough examination of the property. Remember that the surveyor might not visit the property immediately, so booking your survey as soon as possible is best. After conducting the survey, the surveyor will prepare a report, which may take a few more days. Forward a copy of this report to your solicitor as soon as you receive it.
2. Secure a Mortgage Offer
If you plan to buy a property with a mortgage, it is important to have a mortgage offer before exchanging contracts. This is a crucial step to ensure the purchase can go ahead. There will need to be more than an agreement in principle at this stage.
Prepare essential documentation, such as proof of income and credit history, to streamline the application process. Actively communicate with your chosen lender and respond promptly to any requests for additional information. They can only issue a mortgage offer once you have met all their requirements.
Prominent property site Rightmove offers further guidance on preparing your finances and applying for mortgages when buying a property.
On the day of exchange, be ready to hand over a 10% deposit to your solicitor. Ensure the money is easily accessible, as you may need to transfer it on short notice. Failing to have the deposit ready could lead to complications, and the seller may lose trust in the transaction. This could potentially jeopardise the exchange and completion stages.
4. Check Leasehold Agreements
When buying a property with a leasehold agreement, reading and understanding the terms outlined is crucial. Pay close attention to the length of the lease, any ground rent obligations, and potential service charges.
Leases typically contain vital information about maintenance responsibilities, restrictions, and other financial implications. Reviewing the lease carefully ensures you’re fully aware of the financial commitments associated with the property.
5. Arrange Building Insurance
Sellers usually end their policies on the day of exchange, shifting the responsibility of insuring the house to you. Purchase insurance promptly to protect against potential risks. Your mortgage lender may require proof of your insurance policy before exchanging contracts.
6. Explore Rent-Back Options
You can ask the seller for regular updates on their search for another property. This will give you insight into their motivation and ensure they actively seek a new place.
If the seller still needs to find a new home, you can consider exchanging contracts and allowing them to rent the property. This arrangement allows the seller additional time to find a new home while ensuring your purchase is secure. However, having clear terms and agreements is essential to protect both parties.
Why do solicitors take so long to exchange contracts?
Either buyers or sellers can delay the exchange of contracts for several reasons. If either party is part of a chain, they may hold up the process to allow other parts of the chain to catch up. On the other hand, if a survey reveals any issues, the buyer may request more time to investigate them.
House buyers delaying tactics
If you suspect a buyer is stalling, you can give them a deadline for exchanging contracts. You can consider relisting the property if they don’t meet the deadline. Consider offering a discount on the overall sale to encourage the purchase.
Seller delaying exchange of contracts
A delayed exchange of contracts happens when the agreed-upon date for completion passes without it happening. While it can be disappointing, it’s essential to stay calm and think rationally. By taking the proper steps, you can deal with the situation effectively and work towards a successful outcome.
If the seller fails to complete the sale, the buyer can charge them interest every day and request the return of their deposit. Additionally, they may be eligible to claim compensation for expenses related to searches and surveys.
What can go wrong between exchange and completion?
Several challenges may arise between the exchange and completion stages of a property sale. These include delays in the property chain, issues with the property itself, withdrawal of mortgages, and legal disputes. Unforeseen events like sudden deaths, floods, delays in funds, credit score changes, or expired mortgage offers can cause issues.
Will we ever exchange contracts?
Delays can be frustrating and create uncertainty. However, remember that this stage is integral to finalising your transaction. When you exchange contracts, it means that both the buyer and seller are legally committed to the property transaction. This is a significant milestone in your journey, and minimising delays is possible.
The process can be complicated and challenging when buying or selling a property. However, by using the right strategies and managing paperwork efficiently, you can move closer to a successful, speedier transaction.
How to speed up the exchange of contracts- conclusion
In this post, we highlighted all the possible areas where a contract can be delayed.
For solicitors reading this post, we strongly suggest using a Document Management System when managing paperwork and contracts. You can find out more about improving contract exchanges here:
If you’re a property developer or investor looking to streamline your contract exchange workflows, DocFlite is the perfect solution for you. What sets this platform apart is its simplicity and effectiveness, making contract management as smooth as possible. With its advanced electronic signature technology and a comprehensive set of tools, DocFlite can handle contracts, forms, and other document-related tasks seamlessly. This optimises your operations and significantly increases productivity, providing a hassle-free documentation experience.
For more information on contract exchanges, please see our post on, “What time of day does exchange of contracts happen?”
Disclaimer: The information provided in this article is for information purposes only and should not be construed as legal or financial advice. Always consult with a qualified professional for specific advice tailored to your circumstances.