Once a sale has been agreed, specialist legal representatives (conveyancing solicitors or licensed conveyancers) will be instructed by the buyer and seller. It is usual for the seller’s representative to raise a contract for sale of the land, provide answers to what are called ‘pre contract enquiries’, offer proof of title and set out a schedule for what is included in the sale and when the sale will take place.

The buyer’s representative will act on the buyer’s behalf making sure that the title to the property is not faulty and checking that the terms of the sale are reasonable and lawful. He will also arrange for all monies to be made available both from the buyer (the deposit) and the buyer’s selected mortgagee (usually the bank or building society).

Once the buyer’s representative is happy that all the legal niceties have been resolved and he has a confirmed mortgage offer and is ‘in funds’ for the other monies required to pay the deposit, legal fees and stamp duty, etc, then a date must be agreed to complete the sale. In other words, the seller will move out, the buyer will pay over all remaining monies for the purchase and collect the keys from the seller.

The completion date can be at any time and date agreed between the parties but given the need to arrange transfer of utilities and to organise a moving company, etc, it’s normal for completion to be say 4 weeks after the date that the contract is exchanged. More and more regularly solicitors are agreeing to exchange contracts and complete on the same day. There is nothing wrong with this practice, but if the sale falls through at the last minute, before contracts have been exchanged, you could end up with removal lorries parked outside a home you do not own and with a great deal of expense incurred which you have no legal right to recover!

The benefit of exchanging contracts a few weeks before the set completion date is that, if either party does not then stick to their obligations under the terms of the contract, either side can sue the other either for ‘specific performance’ (in other words ask the courts to make the seller sell the house to you in accordance with the contract terms) or alternatively, for damages.

For example, any losses incurred as a result of the sale not going through may be reclaimed by the injured party. As a first step, a seller might, for instance, retain the buyer’s deposit and instruct his agent to remarket the property.

It’s therefore sensible that the completion date is set with regard to a realistic time frame and is some time after exchange of contracts.

Next article: What does Completion Mean?

 

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