When you are selling or buying a property, ‘exchanging contracts’ is a crucial point in the conveyancing process.
What is Exchange of Contracts?
The exchange of contracts is the only point where the transaction between the two parties becomes legally binding, and there is essentially ‘no going back.’ Prior to this moment, both parties are well within their rights to pull out of the sale, even considering the wasted time and expense.
How long does it take?
Exchanging contracts usually takes around 4-6 weeks to complete. If you require an exchange to happen quicker than this, you should inform your conveyancing solicitor before you instruct them so they can confirm that they can guarantee the request.
When does it happen?
If both party’s solicitors are satisfied that enquiries are dealt with, the necessary funding is in place, and the completion date is agreed, then contracts can be exchanged.
Methods of exchange
There are a number of possibilities as far as the method is concerned when exchanging contracts. Solicitors often refer to them as ‘Formulas’ and they will decide which method is best for your transaction.
- In person – While this would have been the most popular method in the past, it is rare that two solicitors physically meet up and exchange contracts. Even if two firms are local they will usually use one of the other methods listed.
- Formula A – This where the buyer’s solicitor posts the clients part of the contract and their deposit to the seller’s solicitor, who will phone to confirm the exchange has taken place.
- Formula B – This is probably the most commonly used and hassle free method. Both solicitors talk over the phone to check contracts are identical and if they agree, they will be exchanged.
- Formula C – Similar to Formula B, but is most often used when there is a chain of transactions involved in the exchange.
At Peter Robinson & Co. we strive to ensure that exchanging contracts goes as smooth and hassle free as possible for our clients. Get in touch with a member of our team and let us advise you on all the services available in connection with Residential Conveyancing.