Residential Property specialist Olivia Sweet considers the pros and cons of simultaneous exchange and completion.
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Simultaneous exchange and completion
Whether you are buying or selling a property, the two big milestones are exchanging contracts and completion. On exchange of contracts, the agreed completion date is recorded on the contract.
In most cases, the parties agree a short delay between exchange and completion. Typically, this delay is a couple of weeks, but ultimately it’s for everybody in the conveyancing chain to agree. Exchanging contracts provides certainty. And armed with that certainty, the parties can proceed to finalise arrangements for completion day.
However, although less common, there’s no legal or procedural reason why exchange and completion cannot happen simultaneously.
See our helpful completion day checklist.
When do exchange and completion happen on the same day?
The most common scenarios where simultaneous exchange and completion occur are where:
- the property 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 there can be advantages to simultaneous exchange and completion, there are also significant risks. And the biggest potential disadvantage is the uncertainty as to whether completion will happen on the expected day. Among the possible reasons for late postponement include a delay in receiving:
- completion funds.
- signed paperwork in the post.
- conveyancing searches.
Your conveyancing solicitor will advise you that you should not exchange contracts until there is certainty that completion can take place at no risk to you.
Other disadvantages to simultaneous exchange and completion are:
- one party deciding to pull out on completion day; or
- the seller suddenly and unexpectedly demanding more money for the property. A seller holding a buyer to ransom is very rare, but it does happen!
An abortive transaction means wasted time and inconvenience. And 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 may simply be delayed rather than aborted. However, in that scenario, you risk your lender requesting the return of mortgage funds. The knock-on effect of that is yet more delay while funds are requested again.