Can I Exchange and Complete on the Same Day?
22 November 2017
The short answer is yes it is possible, but is it worth the risk and stress of doing so? There are some transactions where it would be easier to exchange and complete on the same day but for others it could be difficult, if not impossible.
What are the Risks?
If you are exchanging and completing on the same day you will not have a binding contract in place until the day you are due to move in.
Due to the nature of property law a buyer or seller can pull out of the transaction right up until the point of exchange. Unfortunately you could face an unscrupulous buyer/seller who will throw in an unexpected demand leaving you with little time to negotiate or consider the matter in detail. Or worst case scenario simply pull out altogether.
There are many things to consider when moving house. Would you be willing to risk the completion not going ahead having done all the packing, arranged a removal firm/hired a van, cleared the property of rubbish, sent in the meter readings? If you had prepared everything for your move only for the transaction not to then complete on that day it could be a very stressful and expensive day.
There are a number of reasons why it might not be practical, or even possible to exchange contracts and complete your property transaction on the same day.
Buying with a Mortgage
If you are buying a property with a mortgage most lenders insist on a notice period before they will send the monies for completion, usually 5 working days. Funds are usually requested on the day of exchange. If the completion does not go ahead on the day stipulated then the monies have to be returned and there will be transfer fees for doing so. You are responsible for paying interest on the mortgage from the day the money is released.
If you are in a property chain you will need the agreement of all parties to complete simultaneously, which in practice is rarely done. Otherwise you could run the risk of selling your home first then failing to complete on the purchase in time due the number of other transactions in the in the chain, effectively leaving you homeless.
Moving Your Belongings
If you allow for a period of time between exchange and completion you can arrange for removals knowing that the buyer/seller are contractually bound to complete on a specific day. But if you have arranged a simultaneous exchange and completion you will have to arrange for removals without being in a legally binding contract that provides some certainty of completion. As such you could end up emptying one property and may be unable to load your belongings into another. Add to this the cost of the removal and possible storage costs while you wait for your purchase to complete.
Giving Notice to Landlords
If you are in rented accommodation you will most likely need to give notice to the landlord of your intention to leave. If you cannot balance the dates you could end up paying for rent and a mortgage at the same time.
Also consider whether there are any parking restrictions on the street. Some Councils will need to provide permits for you to park up and unload, therefore notice in advance will be needed. Some Councils have different rules depending on whether the van/lorry being used is liveried or not.
The property buyer is responsible for insuring the property from the time contracts have been exchanged. You would need to have your insurance in place on the day of completion, so exchanging and completing on the same day can cause complications with this. If you are buying a property with a mortgage then the lender would usually require proof of the insurance.
When Can You Exchange and Complete on the Same Day?
Simultaneous exchange and completions are suitable in some situations. These might include purchases or sales being carried out by buy to let landlords or companies. Sometimes these buyers may be able to proceed with cash only, so will not encounter the issues associated with a mortgage lender. They also would not need to move in (or out) on the day, meaning there would be no need for removals companies to be arranged and they would not be at risk of ending up homeless.