When Do House Contracts Get Exchanged: A Guide to the Home Buying Process
Buying a home is an exciting and complex process. One of the most important steps in the process is exchanging contracts. The exchange of contracts is when the buyer and seller become legally bound to the sale of the property. But when exactly does this happen? In this article, we will guide you through the home buying process and answer the question „When do house contracts get exchanged?“
Step 1: Finding a Property
The first step in buying a home is finding a property that you want to buy. This can be done by working with a real estate agent, searching online, or attending open houses. Once you find a property you like, you can make an offer to the seller.
Step 2: Negotiating the Offer
After making an offer, the seller can either accept, reject, or counteroffer. Negotiations may continue until both parties agree on the price and terms of the sale.
Step 3: Conducting Searches and Surveys
Once the offer is accepted, the buyer will typically conduct searches and surveys to ensure that the property is in good condition and that there are no legal or financial issues that could affect the sale.
Step 4: Mortgage Offer
If you are obtaining a mortgage, you will need to go through the application process. Once your application has been approved, you will receive a mortgage offer from your lender.
Step 5: Exchange of Contracts
The exchange of contracts is usually the final step in the home buying process. This is when the buyer and seller become legally bound to the sale of the property. This typically happens after the buyer has paid a deposit (usually 10% of the purchase price) to the seller`s solicitor.
The exact timing of the exchange of contracts can vary and is usually negotiated between the buyer and seller. In England and Wales, it is common for contracts to be exchanged around two weeks before the completion date. In Scotland, the exchange of contracts and completion happen on the same day.
Once contracts are exchanged, both parties are legally obliged to complete the sale. If either party fails to complete, they can be sued for breach of contract.
Step 6: Completion
Completion is when the buyer pays the rest of the purchase price and takes possession of the property. This typically happens around two weeks after the exchange of contracts in England and Wales, but can vary depending on the negotiated terms of the sale.
In conclusion, the exchange of contracts is a crucial step in the home buying process. The exact timing of the exchange can vary, but it is typically negotiated between the buyer and seller. It is important to ensure that all searches and surveys are conducted before the exchange of contracts and that you have the necessary funding and legal support in place. By following these steps, you can ensure a smooth and successful home buying process.