Checklist for Exchange of Contracts

When it comes to buying or selling a property, the exchange of contracts is a crucial step in the process. This is the moment when both the buyer and seller become legally bound to the sale, and usually involves payment of the deposit and setting a completion date. However, before you reach this stage, there are several key items to check off on your checklist to ensure a smooth and stress-free exchange of contracts.

1. Confirm the details of the sale

First and foremost, make sure that all essential details of the sale are correct and agreed upon. This includes the property address, sale price, completion date, and any conditions such as fixtures and fittings that will be included in the sale.

2. Conduct a property survey

It is always recommended to conduct a property survey before exchanging contracts. This will help identify any potential issues with the property that may affect the sale, such as structural problems or major repairs that are needed. Make sure to carefully review the survey report and address any concerns with the seller before proceeding.

3. Review the contract

The contract is a legally binding document that outlines the terms of the sale. Before signing, ensure that you have reviewed and fully understand all the terms and conditions. It is also important to ensure that any special conditions that were agreed upon are included in the contract.

4. Arrange financing

If you are obtaining financing for the purchase, ensure that your mortgage or loan has been approved and that the funds will be available in time for the completion date. If you are paying cash, ensure that the funds are accessible and ready to be transferred on the completion date.

5. Arrange insurance

Before exchanging contracts, you should arrange buildings insurance to cover the property from the moment of exchange. This will protect you in the event of any damage to the property that may occur before completion.

6. Pay the deposit

Once you have confirmed all the details of the sale and reviewed the contract, it is time to pay the deposit. This is usually 10% of the sale price and is paid to the seller’s solicitor. It is important to ensure that the funds are readily available and that the payment is made on time.

7. Sign the contract

After paying the deposit, you can sign the contract. This is usually done in person or by post, and once both parties have signed, the exchange of contracts becomes legally binding.

In conclusion, the exchange of contracts is a critical step in the process of buying or selling a property. By following this checklist and ensuring that all necessary steps have been taken, you can help ensure a smooth and successful exchange of contracts. Remember to always consult with your solicitor or conveyancer if you have any questions or concerns.