You have finally received the good news from your solicitor that contracts have been exchanged. You now have a fixed date for completion. So, other than getting excited about your new home, booking a removal company, packing or ordering furniture, what should you do next?
In the majority of transactions (unless the property is leasehold) from exchange of contracts the buyer will be responsible for insuring the property. This is because they will still be obliged to complete the purchase, even if the property is damaged between exchange and completion. Sellers should maintain their insurance as well and this is essential if you have a mortgage.
It is good practice to make sure that your solicitors have any cleared funds they need from you no later than the working day prior to completion. This helps to avoid any delays on the day of completion. Cheques take a few days to clear, so electronic payments are best. Please also make sure that the funds come direct from yourselves, unless you have agreed otherwise with your solicitor in advance. Most solicitors will also ask for the mortgage funds to arrive the day before completion.
Services and outgoings
Sellers should arrange for all utility meters to be read on the completion date (the utility companies will require you to do this and advise them) and inform your water/drainage company, telephone supplier and Local Authority of your move.
Buyers should also read the electricity and other meters and contact all utility suppliers and the Local Authority to give them your details and any readings. If the sellers have not left details of the suppliers for you, they can be found in the Property Information Form.
Sellers and buyers should also consider setting up mail re-direction via the Post Office and informing banks and other organisations that contact you by post of your new address.
Completion day arrangements
The sellers will be required to provide vacant possession on completion. This means clearing the entire property, including any loft space, garages, shed and outbuildings of all of their belongings. The property should be left clean and tidy so that the buyer can move straight in. This should be no later than 1pm. If there are delays the buyer could potentially claim interest and losses.
The buyers solicitor will transfer the purchase money to the sellers solicitors. This should also be by 1pm. Once the money has arrived, the sellers solicitors will ring the agents (assuming it is not a private sale) to confirm the sale has completed and the keys will be released to the buyer. The timing of this will vary depending on the length of the chain and whether all solicitors have received mortgage funds and client balances before the day of completion. The keys cannot be collected and should not be handed to the buyer before you have had confirmation that the funds have been received and completion has taken.
Although the contract states that completion must take place by 1pm, it is not uncommon for completion to take place later in the day. This can be because there is a delay in transferring funds, or it takes a seller longer to move out than they thought. If this happens, most chains work together to enable people to move in and get the funds to the required accounts. Very occasionally, completion cannot take place on the completion date. If this happens, the contract will provide for the defaulting party to be responsible for the costs and losses suffered by the chain.
The contract will state that the defaulting party will have to pay interest to the other (usually at 4% above base rate) on the balance of the purchase price.
The non-defaulting party can also claim any additional losses they suffer due to the failure to complete (including those incurred in their related transactions).
Thankfully it rarely comes to this, as we would not advise clients to exchange unless they were certain that they would be in a position to complete.
Last and by no means least, make sure you have a nice bottle of the fizz in the fridge!