Exchange of contracts
After all the enquiry forms and contracts have been signed and returned, this leads to the exchange of contracts. the Exchange of Contracts is one of the milestones within the home buying process.
This is the stage at which the sale becomes legal and binding. The buyer’s solicitor and the seller’s solicitor will therefore get involved in the contract negotiation, exchange of contracts and ensure completion through transferring the legal title and funds.
One of the negotiation element at this point is a date for completion, i.e. the date that the seller will need to move out of the property and the buyer can move in if he so wish.
Another way of formally defining the exchange of contracts:
The stage at which the transaction between the seller and the buyer becomes legally binding on both parties. At the point of exchange of contracts a completion date must be agreed if it has not been agreed already. The completion date will be written into the contract.
Usage: I have exchanged contracts with my seller.What does Exchange of Contracts mean?
Solicitors:
The Exchange takes place between the two Solicitors, one acting for the purchaser (buyer) and the other acting for vendor (seller), after their preliminary work has been completed, and has proved to be satisfactory for both parties.
It is a crucial stage in the process, and any doubts as to whether you should buy (or sell) must be dispelled, as it is the point of no return! At Exchange the buyer legally commits to buy, and the seller legally commits to sell.
