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Once your conveyancer has completed all the pre-exchange work in the conveyancing process, it is time to exchange. You may have planned to achieve the Fastest Conveyancing possible from Day One, or you could find yourself in a position where either the seller, or yourself, now requires a simultaneous exchange and completion.
Simultaneous exchange and completion means that you will exchange and complete on the same day.
It is usual practice to allow at least a week to ten days between exchange and completion to give the parties time to get ready to move in or move out. If buying with a mortgage the lender usually requires at least one week's notice to release the funds, and the funds are usually requested on the day contracts are exchanged.
A Conveyancing Solicitor must consider money laundering and mortgage fraud where an unusual amount of pressure is being applied for the matter to exchange and complete quickly, and proper instructions should be taken as to why their client wants this.
For example, the buyer may have submitted a fraudulent mortgage application and wishes to push through the transaction very quickly so the lender does not withdraw the offer.
Alternatively, the buyer or seller could be involved in money laundering and hope to buy or sell the property as quickly as possible to convert the proceeds of money laundering swiftly.
The conveyancer should ask the right questions and ensure potential money laundering or mortgage fraud scenarios are all considered where necessary.
In most cases the lender will require at least 5 working days notice to release funds.
In exceptional cases, some lenders can release funds within 2 or 3 days. If you are aiming for a simultaneous exchange and completion and you have an idea of when this will take place, your conveyancer should request the mortgage funds in good time.
Please note - if completion does not take place, the funds must be returned to the lender.
(Lenders usually allow the conveyancer to hold onto the funds for a few days in the event completion is delayed. The particular lender’s requirements should be checked if this is the case. Interest on the mortgage is payable on the day the funds are released to your conveyancer).
As a seller you must be in a position to have the property cleared out properly, removing all necessary fixtures and fittings, clearing it of rubbish, removing furniture etc., for when the buyer moves in.
Where exchange and completion is taking place on the same day, you will find yourself having to do this beforehand, when the buyer has not even legally committed himself to the purchase.
As a buyer, you may have to book a removal company to move your belongings in to your new home.
You will have to do this a few days beforehand, before you and the seller have legally committed yourselves to the transaction so you are taking a risk.
If a chain is involved (i.e. there is a related sale or purchase) a simultaneous exchange and completion will not work unless the parties on either side agree to it.
In practice, you will rarely, if ever, see this.
You will not know whether the transaction will take place right up until the day of completion which can cause worry and stress.
You may have booked both time off work, and a removal company, only to find that on the day of completion something goes wrong, such as that there has been a delay in receiving mortgage funds.
There are no glaring problems with effecting a same day exchange and completion, however, it is important for the parties to understand their respective positions in the event that things go wrong.
It is very important to keep your conveyancer updated of any change in circumstances so all parties are aware of what is going on and can change the date for completion if need be.
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