You’re purchasing a property. People are talking “contracts, deposit and exchange”, but what does this all mean?
This blog follows on from Your offer has been accepted, now what? where we talked about why you need a good solicitor to represent you. In this blog we’re going to discuss the next phase in purchasing a property.
First, your Solicitor will need some key information from you
• Have you got finance for this purchase?
• Are you purchasing in your name or an organisation?
• Do you require pest, building and survey reports organised?
By now, the real estate agent will have contacted the vendor’s solicitor who prepares the contract. The contract is then passed on to your solicitor.
A copy of the contract may need to go to your bank to finalise approval for any finance. Your solicitor will forward the contract and arrange pest, building and survey reports.
Once finance is approved, and the reports have arrived, your solicitor will contact you to run through the contract. If all is agreed upon, this is the time for you to sign the contract.
1. What if there is something wrong with the contract or reports?
Your solicitor will give you advice for any contract and report issues.
They will raise any issues with the vendor’s solicitor to find a resolution. A price reduction may be agreed upon, or changes to inclusions and settlement date.
2. When do I pay the deposit?
An exchange of contracts cannot take place until the deposit is paid.
Once the contract is signed, you will need to pay the deposit to the real estate agent. The agent will let your solicitor know when the deposit is in their account.
The contracts can now be exchanged.
3. Once contracts are exchanged there is a legally binding contract between the vendor and purchaser.
Upon exchange of contracts your solicitor is required to provide a certificate. This certificate states that you have received legal advice and waves your right to a cooling off period. Neither party can get out of the contract without serious consequences.
If you do not go through with the purchase you may risk losing your deposit and being sued for damages. It is important to ensure everything is as you want it before contracts are exchanged.
Your solicitor is here for advice and to ensure all the i’s are dotted and t’s are crossed.
Make sure you tune in to our next blog. We’ll discuss what happens after exchange and the settlement process.
Do you have a conveyancing question? Give our team a call!