Exchange of Contracts
Contracts are exchanged when the seller and purchaser have both agreed on a price and have signed a copy of the contract (each party to the transaction signs a separate but identical copy of the contract) the contracts are dated and the deposit has been paid by the purchaser. The signed contracts are handed to the other party or their conveyancer so that the sellers signed contract is held by the purchaser’s conveyancer and vice versa. The contract can be exchanged in one of two ways;
- By the estate agent. In this case the contracts would be signed and exchanged shortly after the sale price has been agreed to. The agent would send the appropriate contract to the parties conveyancers and the purchaser would have a 5 day cooling off period in which to get any reports, have the contract explained and have finance approved.
- By the conveyancers. In this case it would be normal for the purchaser to have all reports done, contract explained and finance approved before the exchange of contracts. It is normal practice in these instances to have the purchaser waive their cooling off rights so that the contract is binding on both parties as and from the date of exchange of contracts. (you will find that most conveyancers prefer this method of exchange of contracts)