The process of selling or purchasing a house involves many different stages. While the exchange of contracts is an important point near the end of the process, it does not result in the buyer having legal ownership of the house.
After contracts are exchanged, the seller still legally owns the property, but they are contractually bound to sell to the buyer. The transfer of ownership, along with the legal right to move into the house, occurs later on the completion date, which is typically set at the exchange of contracts.
Why does ownership not change at the exchange of contracts?
At the exchange of contracts, the sale becomes legally binding. This means that under the law, the property owner must sell the house to the buyer (even if they receive a higher offer) and the buyer must purchase the property without losing a percentage of the sale price. However, as ownership isn’t transferred at the exchange, the seller retains control of the property until the completion date, which is the final step in the transaction.
Key responsibilities between exchange and completion
Although the seller has ownership between exchange and completion, the buyer is obligated to obtain building insurance for the house. The buyer must also finalise funding. This involves confirming that all mortgage funds are secured with transfer of these funds arranged, along with the remaining mortgage deposit (usually 10% of the sale price), to their solicitor’s account for the agreed completion date.
Conveyancers for both parties finalise the transaction, ensuring that all contractual conditions have been met. They then prepare the transfer deed. The buyer’s conveyancer transfers the remaining house purchase money over to the seller’s conveyancer on the agreed completion date. Conveyancers also ensure all paperwork is completed and that all parties get their respective payments.
Do you need conveyancing solicitors in North Wales?
Providing professional conveyancing in North Wales, at Bennett Smith Solicitors, we offer a comprehensive service. With a wealth of experience assisting in property transactions from our offices in Gwynedd and Bangor, we are proud to serve buyers and sellers in the region with first-class conveyancing. Reach out to us today for advice and assistance.
