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What can hold up exchange of contracts?

Troy Stevens 15 February 2022

What can hold up exchange of contracts?

The exchange of contracts marks the beginning of the end of the home buying process. The hard work is over, and it’s going to be smooth sailing in the countdown to exchange day. Right?

Wrong! Sorry to be the bearer of bad news, but there’s still plenty that can get in between you and that glorious moment when the house sale is legally binding. 

But what can hold up exchange of contracts – and what can you do about it?

What is the exchange of contracts?

The exchange of contracts is the moment when both the buyer and the seller enter into a legally binding agreement that the house sale will go ahead.

During the exchange, both parties sign copies of the contract which sets out the details of the house sale, and the seller signs the ‘transfer of title deed’ form, aka the TR1. 

Also, during the exchange of contracts, the buyer’s deposit must have been received by their solicitor and a date for completion (when you’ll actually get the keys) in the diary.

Why is the exchange of contracts taking so long?

It’s extremely common – not to mention frustrating – for the exchange of contracts date to keep getting postponed further and further into the future. 

Here’s what might be causing the delay in the exchange of contracts:

  • The survey – it often takes a while to get the results of a home survey.  Further, if there is an issue with the survey – for instance, there is a damp problem that wasn’t picked up – there will be a delay while this is explored. An unpleasant surprise during a home survey can cause a mortgage lender to review their offer, meaning further delays. 
  • The mortgage provider – when buying a home, you’re somewhat at the mercy of your mortgage provider. If there are any issues with your application process, they will put the release of funds on hold before they’ve straightened them out.
  • The seller – the seller may be having second thoughts about selling, they may be hoping to get a higher offer, or you may have been gazumped by another buyer. 
  • The chain – if the buyer is waiting for their property sale to go through before they exchange contracts, this could cause significant delays.
  • The solicitor – being busy professionals, solicitors may not be able to update you immediately if anything comes up with your sale. Most solicitors are excellent, but you may be unfortunate in getting one who isn’t great at communicating with you and needs chasing.
  • The curveball – the buyer could be made redundant, need to relocate for work or fall seriously ill while waiting for the purchase to go through.

What does it mean if the exchange of contracts date keeps moving?

Usually, it’s just a case of waiting for the conveyancing process to run its course.

However, there’s plenty that can throw a serious spanner in the works before exchange date. One party pulling out before the exchange is surprisingly common and as it’s perfectly legal, there’s nothing standard in place to protect the other party.

That’s where Home Buyer’s Protection Insurance comes in.

With Home Buyer’s Protection Insurance, you can claim back money you’ve lost on a failed house sale if it’s fallen through for reasons beyond your control.

Home Buyer’s Protection Insurance covers such instances as:

  • the mortgage lender insists on significant rectification work being carried out on the property before they release funds
  • the house is valued at less than 90% of your accepted offer
  • you are gazumped by another buyer 
  • the seller decides not to sell
  • the property is damaged and needs repairing while you’re waiting to exchange
  • you’re made redundant, need to relocate for work or fall ill.

If you are interested in learning more about Home Buyer's Protection Insurance or any of our other products, please get in touch with us today!

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