What does Exchange of Contracts in Conveyancing mean?
Until Contracts have exchanged in a Conveyancing Transaction, there is no form of legally binding agreement between the seller and the buyer. Though the common misconception of having your offer accepted tend to give most buyers a false sense of security into thinking that they now have property to purchase with no recourse, this technically isn’t the case.
What is the process of exchanging contracts?
In most cases, the contract for the sale of a property is prepared in two identical parts by the seller’s solicitors. The seller’s solicitors retain one part for signature by their client (the seller) and the other part is sent to the buyers’ solicitor for execution by the buyer. Once each part of the contracts has been signed by their respective party and the appropriate title checks have been carried out – the parties date and physically exchange each other’s parts of the contracts.
Depending on the circumstances, exchange of contracts can be carried out using 4 methods –
- Telephone Exchange of Contracts
- Personal Exchange
- Postal Exchange
- Document Exchange
Telephone Exchange is the most common method of exchanging contracts and all our solicitors at Express Conveyancing follow this protocol. It is convenient and quick. With a Personal Exchange, the lawyers for each party physically meet and exchange documents to ensure each other’s documents are correctly signed although this method is not commonly used due to the practical issues involved in arranging and attending meetings. Postal Exchange and Document Exchange with the buyers signed part of the contract being sent to the seller’s solicitor in advance before effecting the exchange.
Why is Exchange of Contracts so important?
As outlined above, it is imperative that exchange of contracts take place as soon as possible for both the seller and the buyer to have assurances of the transaction not aborting. With an average abort rate of circa 35% of all transactions due to the Conveyancing Process taking far too long to conclude, it is imperative client’s choose a Conveyancer or Property Solicitor who treats attention to detail hand in hand with a sense of urgency.
Here at Express Conveyancing, our property lawyers exchange contracts on average in 4 weeks as opposed to the industry standard of 12. We achieve this by using state of the art Case Management Systems and electronic means of communication, which even today most High Street Firms tend to shy away from.
Speak to one of our advisors or Property Lawyers on how we can assist you on your next big property move.