|
Can I exchange and complete on the same day?
Whether you are buying or selling a property, the two key milestones are exchanging contracts and completion. When contracts are exchanged, among other things, the agreed completion date is recorded on the contract. However, a common question clients ask is “Can I exchange and complete on the same day?” – otherwise known as simultaneous exchange and completion.
See: What happens if conveyancing completion is delayed?
In most cases, the parties agree on a short delay between exchange and completion. Usually, this delay is a couple of weeks, but ultimately it is up to everyone in the conveyancing chain to agree. Exchanging contracts provides certainty. And with that certainty, the parties can proceed to finalise arrangements for completion day.
However, although less common, there is no legal or procedural reason why exchange and completion cannot occur simultaneously.
See our helpful completion day checklist.
When do exchange and completion happen on the same day?
Among the most common situations where simultaneous exchange and completion take place are where:
- the property is already empty (vacant), or
- the transaction is not part of a chain, and the buyer and seller do not need to physically move home on completion day.
Risks of simultaneous exchange and completion
Although there can be advantages to simultaneous exchange and completion, there are also significant risks. The most notable potential drawback is the uncertainty over whether completion will occur on the expected day. Possible reasons for delays include a postponement caused by a delay in receiving:
- completion funds.
- signed paperwork in the post.
- conveyancing searches.
Your conveyancing solicitor will advise you that contracts should not be exchanged until there is certainty that completion can take place without any risk to you.
Other disadvantages of simultaneous exchange and completion include:
- one party decides to pull out on completion day; or
- the seller suddenly and unexpectedly demands more money for the property. A seller holding a buyer to ransom is very rare, but it does happen!
An abortive transaction results in wasted time and inconvenience. Unlike a failure to complete following exchange of contracts, there is no recourse to the other party to compensate you for your wasted expenditure.
Of course, the transaction might simply experience a delay rather than fail. However, in that case, you run the risk of your lender asking for the return of mortgage funds. The resulting effect is further delay while you request funds again.