I am buying my first house and people keep mentioning ‘exchange of contracts’ and ‘completion.’ What is the difference?
When we refer to exchanging contracts, we are talking about the point in the house buying process when you are legally bound to go ahead with the purchase.
The contract will be signed and dated by your solicitor and will contain a completion date that has been agreed by all parties in the chain.
Once contracts have been exchanged, which is a technical matter dealt with by your solicitor, the completion date is fixed and legally binding. If you then failed to go through with the transaction, you would be in breach of contract and liable to incur legal costs as a result.
On the day of completion, you will receive the keys for the property and it becomes yours to move into.
I am moving from a rented property into my first home. When should I hand in my notice?
It is important not to give your landlord notice that you wish to leave until contracts have been exchanged on the property you are buying and a completion date is fixed. If you serve it too early, you could end up homeless should your purchase fall through!
You need to bear in mind how much notice you have to give when setting a completion date on your purchase. If you can afford to do so, you could look to overlap the two, giving you some breathing space to move into your new house or carry out any work required.
If it would be a struggle to pay the rent and mortgage in the same month, speak to your solicitor about setting a completion date that fits in with your notice period.
Do I need to commission a survey?
If you require a mortgage, your lender will carry out a survey on the property you are buying, to ensure the money it is risking is reflected in its value.
This is only a basic valuation, not a full survey and is more for the lender’s benefit than yours.
It is always sensible to have your own survey carried out on the property. It is probably the largest purchase have made to date and I’m sure unexpected building work wouldn’t be welcome.
Instruct a local surveyor that comes recommended by an expert. We are happy to refer you to a trusted firm who will carry out an independent assessment of the property’s condition on your behalf.
If you are a first time buyer with a question about moving home, our residential property expert, Sarah Gaunt, would love to hear from you.