How Long Between Exchange and Completion?

How long between exchange and completion?

The time it takes to move from exchange to completion is usually 1-2 weeks but it can happen faster or last longer, especially if both parties need more time to organize themselves for the competition. 

In this article, we’ll explain what exchange and completion are, whether there is a maximum time between exchange and completion in the UK, and what you can do to speed up the process.

Let’s dive in.

What Is an Exchange?

An exchange of contracts is when two solicitors, representing the buyer and the seller, meet and swap signed contracts for the property. At this point, the contract becomes legally binding, and they can no longer back out of the deal without penalties.

Exchanges can take place over the phone as well. In this case, both solicitors read out the contract and send the documents to one another.

When contracts are exchanged, the buyer has to put down a deposit to the seller, usually around 10% of the property’s value, to signal that they are serious about the purchase. If 10% is too much, your conveyancer should be able to negotiate a lower deposit amount.

What Is Completion?

Completion is the final step of the property transaction, where the seller officially transfers full ownership of the property to the buyer.

It takes place when the seller’s solicitor confirms they’ve received the full purchase monies.

Usually, sales are completed on a Friday, so the new owner has the entire weekend to settle in the new property. The buyer is usually given vacant possession by 1 p.m. unless the parties have a different agreement.

Should any issues arise, you’ll likely have to wait until Monday to resolve them, given that banks don’t usually work during weekends. The good news is your conveyancers will deal with them.

How Long Between Exchange Of Contracts and Completion?

The average time between exchange and completion is 1-2 weeks, and sometimes longer. The completion date is set during the exchange, which means you can choose when you want it done. 

Here are some of your options:

• 3 days between exchange and completion.

A fast exchange to completion time of less than a week is the best option for a no-chain and vacant property. Since the seller doesn’t need any extra time to pack and move out, this option has few downsides other than it may take your mortgage lender more than 3 days to send your conveyancer the funds.

Opting for a 3-day exchange-completion time is not a good idea if you live in a rental since your landlord will require you to hand in a notice, which means you’ll have to pay rent for a place where you no longer live.

• 1-2 weeks between exchange and completion 

This is the ideal time between exchange and completion, as it gives both parties space to organize their documents, like building insurance and draw down a mortgage. It’s also more suitable for property chains where more parties are involved.

• 1-3 months between exchange and completion.

Leaving a long gap between exchange and completion is typical for first-time buyers who are looking to tie the rental notice period with their exchange. Another advantage is that this agreement gives both the seller and the buyer plenty of time to prepare for completion.

• Exchange of contracts without a completion date.

Conducting an exchange of contracts without settling a completion date is typical for buyers who are investing in a new build. They have 28 days to exchange contracts once they reserve the property, but there is no set maximum time between exchange and completion for a new build. 

The seller will give you an approximate time when the building will be complete, but the final date can be delayed.

Can The Sale Exchange and Completion Happen On The Same Day?

A same-day exchange of contracts to completion is possible, but it comes with plenty of logistical issues. 

Doing exchange and completion on the same day means you might not receive the necessary paperwork on time, your mortgage lender might not be able to send you the funds you need for the property, and the seller might not have enough time to pack and leave the property in a reasonable condition.

There’s also the risk that you miss something, given that you have plenty on your hands and only 24 hours to finish everything.

In a best-case scenario, exchange and completion on the same day is feasible with a cash buyer and buy-to-let investors who are willing to let an existing tenant stay on the property for a certain period of time.

Can You Do Building Work Between Exchange & Completion?

It is possible to start doing building work after the exchange of contracts by signing a legal agreement known as ‘Key Undertaking’. 

This is a legal document issued by a conveyancing lawyer which gives the buyer access to the property between exchange and completion, in which the buyer agrees to compensation for any damages that might occur during refurbishment. (Here’s everything you need to know about underpinning a house).

How To Speed Up Exchange & Completion

The frustrating part about the entire process is that the delays that take place are often unexpected and out of anyone’s control. Here’s what you can do to speed things up:

• Communication: The key to moving from the exchange of contracts to completion in the shortest amount of time possible is for all parties involved to respond to requests for information promptly.

• Choose a cash buyer: Buying in cash can significantly speed up the process.

• Make arrangements in advance: Setting up an exchange and completion date can help all parties work towards a given timescale.

• Organise your legal documentation: Having all your necessary documents in one place can help you spot any missing files and save you time when a solicitor requires them.

Bottom Line

Exchange of contracts is the process in which both the buyer and the seller commit to the deal, and completion is the final point of the transfer, where the buyer officially becomes the new owner of the property. 

The average time between exchange and completion is 1-2 weeks, but it can be shorter or longer, depending on the agreement between the buyer and the seller.