What Does Completion Date Mean When Buying a Property?, by Matt Stevens
Getting a mortgage often feels like a marathon, it’s a prospect that demands a considerable degree of time, money, and patience. So, when it comes to the last step in the process, namely the completion date, you’ll want to just relax in your new home or flat as soon as possible.
However, just as the entire procedure is inherently complex, so too is the decisive final day. It’s common to be stressed and restless on such occasions. After all, until the exchange of contracts, both the buyer and seller are entitled to pull out of the deal without incurring serious charges.
Yet, there’s usually no reason to worry. What’s happening behind the scenes that may be holding you up is generally essential. So that you can come to a better understanding of everything involved, we’ve put together this piece which answers the question “what does completion date mean when buying a property?”.
What is the completion date?
As the name suggests, the completion date, or completion day, is when you become the official owner of the property you’ve chosen to buy. It’s when you complete the purchase of the house or flat by having your conveyancer transfer the required funds to the seller of the property.
Specifically, your conveyancer transfers your mortgage deposit in addition to the money from your selected lender to the seller’s conveyancer in order to cover the total value. During which, both conveyancers will verify that the full payment has been transferred. Afterwards, your solicitor will call you to say that you can collect the keys. At this point, the property is your legal entitlement and the seller has to move out so that you can move in.
When is the completion date?
Generally, the completion date will follow between one to four weeks after the contracts have been exchanged, where it is then your legal obligation to purchase the property.
There are two constants with completion dates, and these are that it will be on a weekday since the bank has to be open, and that it has been agreed upon by each party. Both yours and the seller’s solicitor communicate accordingly to arrange a suitable date for completion, with the time of day typically being between 12-2pm.
Can you exchange contracts and complete on the same day?
Yes, you can exchange contracts and complete the property purchase on the same day. Albeit, this practice is rarely advised. Principally, this is due to how you wouldn’t have a binding contract in place until the day of the actual move. In turn, this signals a level of risk owing to how it opens up the potential for a buyer or seller to withdraw right before the point of exchange.
If this was to occur, then it would mean that your conveyancer would have to return yours and your lender’s funds. If the standout issue was then resolved, they’d then have to request the funds again, further adding to the length of the whole procedure. Likewise, you could lose out on any expenses you paid for moving fees, and alongside this, you might have to pay a fine for not moving out of your current property on the due date. This is particularly important if you’re a part of a property chain, where there is more room for misalignment.
For the associated risks, same-day exchange and completion tends to only happen in cases of buy-to-let properties, where no move is implied, nor is funding from a mortgage lender necessary. As a rule, it’s best to have at least one week between the exchange and finalisation of the purchase so that you can ensure the process goes smoothly, i.e., so that there is no sense of things feeling rushed.
What happens on the completion date?
On the completion date, there’s not much you yourself can do until the purchase has gone through. Instead, your solicitor will bear the brunt of the responsibility by carrying out an assortment of tasks including:
Making sure that you have paid your deposit, so that they can request money from your lender.
Organising a special CHAPS payment via the bank to transfer the money to the seller.
Creating completion statements which comprise all payments.
Requesting any outstanding payments, such as from the seller’s estate agent.
Awaiting the seller’s solicitor’s confirmation of received funds.
Once all of this has been completed, the seller’s solicitor will call yours to let them know that the property’s keys are available for you to pick up. Followingly, your solicitor will then make you aware of this. At which stage, the seller should be ready to leave the property so that you can move in, ideally before midday.
What happens on the completion date when buying a new build?
New build properties fundamentally differ from others in that they are sometimes bought before they are built. Consequently, it’s often not possible for a fixed completion date to be given regarding new builds.
For instance, the home’s construction could be subject to delays. And so, effectively, there may be an extended period from the signing of the contract to the eventual handover date.
Although, this doesn’t go to say that you’ll be left in the dark, your conveyancer will contact you and provide details so that you have enough time to make any final arrangements with your mortgage lender prior to completion.
What can go wrong on the completion date?
Not all completion dates are without problems, meaning it's good to set your expectations realistically, even if there’s just a slight chance of things going wrong like:
There being a delay in the transferring of funds - E.g. if you are late with your mortgage deposit or your lender is late in releasing their funds to the relevant solicitor, then there’s a chance completion will not happen on the decided day.
You missing banking deadlines - If all the funds aren’t transferred by 3pm or 4pm so that completion can take place, then you will need to wait until the next working day.
You missing the contracted time for completion - If you miss this time, usually around 12-1pm, then you would be in breach of contract. But, if you’ve done everything needed of you, your conveyancer will handle the rest.
There being a delay in the property chain - If you’re a link in a property chain, then one party’s issue can hold up the entire process until it has been resolved. Fortunately, you won’t be financially impacted by this if you’re not responsible.
How to prepare for completion day
On the back of all we’ve discussed, it’s recommended to be fully prepared for your completion date. This makes it increasingly likely that the day will go on without a hitch and you’ll come out feeling satisfied with the achievement of getting a spot on the property ladder.
Related preparations consist in having your phone at hand so your solicitor can easily get in touch, having all the appropriate paperwork nearby so that details can be looked over, and checking that your funds are available for transfer.
Likewise, you can prepare long before the completion day by hiring an expert mortgage broker to thoroughly evaluate the deal so that you don’t run into any unwanted surprises when you eventually move in. For example, if elements of the property were included within the deal but were taken by the seller on the day of completion, then this can be flagged up if the contract clearly stipulates such aspects.
We at The Mortgage Genie have helped many of our UK clients in avoiding any unpleasantness when it comes to their completion date. We are equipped with the experience and knowledge to guarantee that your completion day goes efficiently and effortlessly, all by guiding you through the mortgage process from start to finish. If you require a team of expert mortgage brokers, then be sure to reach us at 01915809890. And why not see how much you could borrow up to today by using our mortgage calculator?