As a rule, the contract specifies who must take out building insurance between the exchange of the contract and the conclusion of the contract. The bonus will be paid to your lawyer upon exchange, who will then transfer the entire sum of money – including mortgage funds and any other outstanding amounts – to the seller`s lawyer at the end. However, if a mortgage is required for the purchase, the lender may need five business days in between, and it is much less stressful for all parties if there is a moment after the transaction has become legally binding to give everyone time to make moving arrangements. When buying your home, one of the critical points that everyone refers to is “contract exchange”. But what is it and why is it important? Nowadays, however, it is common for contract exchange to take place over the phone. One party reads its contract and immediately sends its copy to the other (usually my e-mail, then by registered mail). Preparing for the exchange of contracts means signing the right legal and financial documentation and keeping the financing in good hands. I`m buying a new house. Construction was originally scheduled to be completed in July/August 2019. This was later postponed to 27.2.2020. I am now being asked to trade as soon as possible and pay my 10% deposit.

The good news is that when exchanging contracts, lawyers agree on a completion date. Since law firms can be sued if they don`t meet this date, they have a strong incentive to meet the deadline, and so you can be pretty sure that the day everyone agrees, you`ll close permanently. Kate Hathaway, real estate lawyer at Keystone Law, adds: “The buyer must also have received their mortgage offer before exchanging contracts.” This will provide the necessary proof that you have the money to buy your new home. For these reasons, it is in everyone`s interest that the exchange of contracts takes place as soon as possible. Keep in mind, however, that the exchange should only take place when all the important issues have been addressed. When exchanging contracts, the buyer and seller of the property sign an official document that must be completed on the sale/purchase of the property. From that moment on, you are both legally obliged to buy the house. Often, the exchange takes place over the phone, with both lawyers reading the contracts. They then send the documents to each other immediately. Your property transfer lawyer should explain this to you. Standard terms of sale require a 10% deposit, but often buyers don`t have the money available at the time of exchange. Under these conditions, the Seller generally undertakes to accept less than the 10% provided for in the General Conditions.

However, if the buyer does not proceed with the purchase, the seller has the right to sue the buyer for the portion of the 10% deposit that he did not receive. So, in your case, you may be able to agree with the seller to pay 5% on the exchange and the rest at the end. However, if you take into account that in the unusual situation that you do not close, you are obliged to pay the remaining 5% to the seller. Hope this helps, Angela, HomeOwners Alliance This can take weeks or even months, so if you need more time between replacement and completion, you should secure it early. Exchanging contracts is legally binding, so make sure you want to proceed before signing anything. The exchange of contracts is simply the name given at the time when the two lawyers working on behalf of the buyer and seller exchange documents to indicate that an agreement has been reached between the two parties on the sale of real estate. It is usually only possible to trade this way if you are a cash buyer, as most mortgage lenders need more time to do research, mortgage appraisal and possibly a survey of home buyers and have paid by the buyer, not to mention the time it takes them to prepare and prepare a mortgage offer. The exchange deposit is the buyer`s obligation to sell, in addition to the exchange of legally binding contracts. For the purposes of the legal agreement, the exchange deposit varies between 5-10% or more of the purchase price that must be deposited with the buyer`s depositor as unlocked funds, i.e. by bank transfer, cashier`s check or money order or a check cashed by the bank.