If you`re buying or selling a home, it`s important to understand the difference between exchange of contracts and completion. While these two terms are often used interchangeably, they refer to two distinct stages in the home buying process.
Exchange of contracts is the stage when the buyer and seller become legally bound to the transaction. At this point, the buyer will typically pay a deposit, which will be held by their solicitor until completion. The contract will outline the details of the transaction, including the agreed upon purchase price, the completion date, and any other pertinent terms.
Completion, on the other hand, is the stage when the ownership of the property is transferred from the seller to the buyer. At this point, the buyer will pay the remaining balance of the purchase price, and the seller will transfer the property to the buyer. Once completion has occurred, the buyer officially becomes the owner of the property.
So, is exchange of contracts the same as completion? The short answer is no. While exchange of contracts is a crucial stage in the home buying process, it does not complete the transaction. Completion is the final stage, and it is only after completion that the buyer becomes the legal owner of the property.
It`s worth noting that the exchange of contracts and completion can occur on the same day, but this is not always the case. In some instances, there may be a gap between the exchange of contracts and completion, particularly if there are any issues that need to be resolved before the transaction can be completed.
In conclusion, understanding the difference between exchange of contracts and completion is critical when buying or selling a home. While these two terms are often used interchangeably, they refer to distinct stages in the home buying process. By understanding the difference between the two, you can ensure that you are fully informed throughout the process and that the transaction is completed smoothly and successfully.