The time between having an offer on a property accepted and moving in is known as ‘exchanging contracts’. But really it should be called the most nail-biting period of a person’s life.
What very few ‘newbie’ homebuyers realise is that the ‘exchange of contracts’ can drag on for weeks and sometimes months, depending on how non-standard the property is and how well-prepared both sides are.
This can be alarming when a deal (and a dream home) worth hundreds of thousands of pounds is at stake.
The contracts
The purpose of all this stress? For the buyer and seller to sign two identical versions of a single ‘contract of sale’ so that the deal is legally watertight and the sale can proceed.
These contracts are signed by both parties, and they include a lot of detail including for example whether it’s leasehold or freehold, the price being paid, any conditions of sale, details of the two parties involved and much more.
Property details
Before the draft contracts of sale can be drawn up, the seller must fill in what’s called a protocol form, which describes and details the property including any fixtures and fittings included in the sale, its boundaries, any previous neighbour disputes and details of any building or subsidence/damp-proofing guarantees.
When buying a leasehold property – which is usually an apartment – the protocol form will also reveal how many years are left on the lease.
Once this is filled in the buyer and seller are sent a draft contract by their solicitors, which then needs to be read very carefully page-by-page and any questions or problems flagged up to the solicitors, who will then answer or resolve them.
A contract is usually divided into five sections: standard conditions of sale, ‘contract particulars’ (i.e. things specific to the property), incumbrances (such as rights of way and covenants), details of the title number (identifying the land being sold) and the completion date.
What’s the delay?
Typical queries that come up during this period and delay things include tracking down details and financials of a property management company (when buying a leasehold property), queries created by local searches (for example a new ring road recently given planning permission at the end of the garden), an extension that lacks planning permission, and missing title deeds.
Despite the march of online conveyancing services in recent years, and efforts to make the process more transparent, buyers and sellers still require bucket-loads of patience to get through exchange of contracts in one piece.
This can be made more difficult by some agents and solicitors, who sometimes don’t keep their customers fully abreast of what’s going on. It can feel like everything has disappeared into a black hole as weeks pass and nothing happens. The average wait is between 56 days and 84 days.
Here’s our guide to finding the ideal solicitor for the job.
Being in the dark about what’s going on may be frustrating, but it’s not a surprise. The conveyancing process can be both complicated and time consuming for solicitors to complete, and when much of it is still done via the post, it’s no surprise that everything gets delayed.
Mortgage offer
One other delay in the process can be when the buyer has to wait for their mortgage offer to come through. Contracts cannot be exchanged if the buyer hasn’t lined up the finance needed to pay the agreed price, and mortgage approvals can be delayed for many reasons including surveys that flag up structural problems or disagreements over how much a property is worth. If the surveyor values the property at less than the price agreed between seller and buyer, the deal can fall through.
In extreme cases the buyer may even have their mortgage application rejected despite earlier getting an agreement in principle.
Read our guide to mortgage applications and why they are rejected
But once all the problems have been ironed out the sale WILL go ahead - remember over a million property sales go through every year - after which both parties are committed to a specific date to complete the deal and the buyer gets ready to pay the seller the agree price.
Read more about what conveyancers do during the buying process.
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Remember the information provided in this article is for information purposes only and should not be considered as advice.
