When it comes to the process of buying or selling a property, many legal terms are thrown around that can be confusing for those who are not well-versed in the real estate industry. One of the most critical steps in the buying and selling process is the exchange of contracts, but what does this term really mean?
In simple terms, the exchange of contracts is the point in the property transaction where both the buyer and seller sign identical contracts, and a deposit is paid by the buyer. It is important to note that this stage is legally binding, and once contracts have been exchanged, both parties are obligated to follow through with the sale or purchase.
The exchange of contracts is typically conducted through a conveyancing solicitor who will ensure that the contract`s terms are fair and legally binding. It is also during this stage that any conditions for the sale must be satisfied, such as obtaining a mortgage or having a survey completed.
Once contracts have been exchanged, the completion date is set, and the sale is legally binding. This means that the buyer must pay the outstanding balance of the purchase price, and the seller must hand over the property`s keys.
In summary, the exchange of contracts is a critical stage in the property buying and selling process. It is at this point that both parties become legally bound to complete the transaction, and any conditions for the sale must be satisfied. If you are looking to buy or sell a property, it is essential to work with a conveyancing solicitor who can guide you through this process and ensure that everything is done correctly.
