First-Time Buyers Guide - Exchanging
Our first-time buyers guide series of blogs looks at all the different aspects of buying your first home. This piece looks at exchanging, one of the very last bits of the process.
In short, exchanging is the exciting bit where you sign the contract to say that you are the legal owner of the property, and pay your deposit.
What Do I Need To Do Before Exchanging?
There are many steps before you get to this point (read more about them here). But, you need to ensure:
- You have home buildings insurance in place - once you sign this contract, if something were to happen to the property you’re financially responsible. Having home buildings insurance in place before you sign the contract means you are covered.
- You must have a written mortgage offer in place - to prove you have the funds to complete the sale.
- If using one, you must have closed your Help to Buy ISA - your solicitor should instruct you when to close this (and you can read more about closing your account here).
When Does Exchanging Happen?
When this takes place can vary on any process but particularly between buying a new build and buying from someone else.
- If you’re buying from someone else, this will depend on the chain length and how long your searches take. This can be from a few weeks to a few months. Your solicitor may have an estimated date you’re working towards but this can change if you or anyone in your chain experiences problems.
- If you’re buying a new build the exchange and completion dates are usually a bit more defined as you will be working with the developer rather than several different parties. Exchange will usually happen 28 days after your reservation is confirmed/a contract has been issued.
Once you have exchanged, you’ll also get your agreed completion date which will mean you can book removals transport or days off work if necessary.
What Happens During Exchanging?
This is where you’ll pay the agreed deposit for your new home (this is usually between 5% and 30%). If you are in any doubt over what should be paid when, speak to your solicitor who will be able to confirm in your individual case what you need to pay and when.
You’ll also sign the contracts, you and the seller both sign a copy of the contract that says you're now the legal owner. Then each person’s solicitors will swap the contracts and you sign each other's copy.
The agreement that you are buying that property is now legally binding, so the chances of the sale falling through are very low at this point. You’re almost done!
What Happens Next?
Completion is the next big step and the final one before getting the keys. A few things happen at this point including:
- Your mortgage provider releases the funds to pay for your new home, and the balance of money moves.
- You pay your solicitors fees (and if you’re not a first-time buyer, or buying over the threshold, you’ll also pay Stamp Duty at this point).
- Ownership officially transfers with the land registry and your solicitor receives the title deeds for your home.
Then you move on to happily ever after with making your home your own.
If you’re looking for a new home in the East Midlands you can find all of Jelson’s available properties here.