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Whether you are buying or selling a property, exchanging contracts and completion are the two big milestones. When contracts are exchanged, the agreed completion date is recorded on the contract.
In almost every case, a short delay is agreed between exchange of contracts and completion. This is often a couple of weeks, but ultimately it’s for everybody in the conveyancing chain to agree. Once there is the certainty of exchange of contracts, most people need time to make or confirm arrangements for completion day. [See our helpful completion day checklist.] However, although rare, exchange of contracts and completion sometimes happens simultaneously.
When do exchange and completion happen on the same day?
The most common scenarios where simultaneous exchange and completion occur are where the property involved is already empty (vacant), or where 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 sometimes there can be advantages to simultaneous exchange and completion, there are also significant risks. Perhaps the biggest disadvantage is the uncertainty as to whether you will actually complete. If funds are not received promptly, there will be no guarantee that completion will happen. Other potential reasons for delay include signed paperwork not being received in time or delayed conveyancing searches.
Your conveyancing solicitor will advise you that contracts should not be exchanged until they can be absolutely certain that completion can take place at no risk to you.
Other possibilities are that one party may decide to pull out on completion day, or the seller suddenly and unexpectedly demands more money for the property, effectively holding the buyer to ransom – very rare, but it does happen!
If the transaction does not proceed, in addition to wasted time and inconvenience, you may have incurred a lot of expense and will not be able to claim compensation. And even if the transaction is simply delayed, your lender may request the return of mortgage funds with the knock-on effect of further delay while funds are requested again.