When you’re buying a new home, completion day is the day you can finally move in. But while you might feel like popping the champagne while planning where you’re going to put your sofa, for your conveyancer, your completion day is very busy.
Here, we’ll take you through everything that happens on your completion date – the things you have to do, the things happening behind the scenes, and some tips for avoiding the things that can go wrong.
What is the completion date?
Essentially, the completion date is when the house or flat becomes your house or flat because you’ve officially paid for it. It’s the day you complete the purchase by your conveyancer transferring the funds to the seller.
Your conveyancer transfers your deposit money and the money from your mortgage lender to the seller’s conveyancer to cover the purchase price. They talk to each other to confirm that the payment has gone through, and then your solicitor calls you to let you know when you can pick up the keys. The seller legally has to leave the property, and you can start moving in.
When does the completion date happen?
There are only two fixed rules for when you complete on your new home:
- It has to be a weekday because the bank has to be open
- It has to be a day agreed by you and the seller.
As a guide, you’ll usually get a completion date between one and four weeks after the contracts are exchanged, and you become legally bound to buy the property.
It’s best to have at least one week between exchange and completion – this will let you finalise your home loan with your mortgage lender and transfer the funds to your conveyancer. Some people prefer to have longer between exchange and completion so they can make all the necessary arrangements without feeling rushed.
Who decides the completion date?
It’s up to the buyer and the seller to agree on the completion date (and the other parties if there’s a chain). These negotiations usually take place through the estate agent as they can talk to everyone directly.
They’ll consult with you and the seller to find a date that works for everybody, but ultimately, the juggling is down to them – you’re not going to have to get out your diary and contact the seller in person.
Can you exchange contracts and complete on the same day?
Legally, you can exchange contracts and complete on the same day, but your conveyancer will usually advise against it. And even if they are on board, the seller and their solicitor also have to be happy with the arrangement.
Exchanging and completing on the same day is a risky move. If a problem comes up, your conveyancer will have to return the lender’s funds and then re-request them once everything is sorted, which of course can take a while. This can be a very expensive bump in the road – not only will you lose any deposit you’ve paid for your moving expenses, but you might also have to pay a fine if you can’t leave your current property when you said you would.
If it looks like this is necessary then your conveyancer will talk you through the considerations you should be aware of. These include:
- If the seller has already moved out and the property you’re buying is empty
- If you don’t need to move on the same day you complete
- If you’re a cash buyer paying for the property outright (so you don’t have to worry about delays from your mortgage lender)
- If you’re not in a chain, so the risk you’re taking won’t affect anyone else’s property purchase
What happens on the completion date?
Your completion day can be stressful, especially if you’re part of a chain and you’re relying on other people’s days going smoothly. And, unfortunately, there’s often not a lot you can do until at least lunchtime on the day you complete. The contractual time for completion is usually between 12pm and 2pm.
Whether you’re packing or pacing, let’s take a look at what’s going on in your conveyancer’s office.
You will have transferred your deposit to your conveyancer before the completion date. They’ll also receive the funds to cover the rest of the purchase from your mortgage lender, along with any other paperwork they might need. In the morning, your solicitor will arrange a special CHAPS payment through the bank to transfer this large amount of money to the seller.
CHAPS stands for Clearing House Automated Payments System. It’s a special payment system for buying property in England and Wales. There’s an additional charge to pay the bank for arranging this payment but, in comparison to the price of your home, the approx £50 fee doesn’t seem too high.
Once the money arrives with the seller, their solicitor will call your solicitor to confirm and to ‘release the keys’. Your solicitor then calls you to let you know that everything has gone smoothly. At the same time, they’ll let you know how you can get the keys in your hands.
What’s different about buying a new build?
When you buy a brand new home, it’s possible to sign the contract and still not know exactly when your completion date is going to be. Quite simply, if they haven’t finished building the house, you can’t know for sure when you can move in.
In this case, you’ll be contacted when there’s more information, and your conveyancer will give you the time you need to make the final arrangements with your mortgage lender before you complete. After this, completion is a simple process.
What about the completion date when you’re in a chain?
When you’re in a chain, everybody’s house purchase relies on everyone else’s. The transactions happen one after the other, instead of all at the same time, so there’s a chance you might not get your keys until the end of the working day.
If everything goes smoothly and there are no delays (for example, because one bank takes three hours to transfer money or because one buyer’s mortgage lender delays releasing the funds), your completion day should go off like a perfect line of dominoes. The solicitors involved will have experience of dealing with chains to make sure that there’s enough time to complete all the purchases in one day
What can go wrong on completion day?
It’s always best to plan for the best and prepare for the worst. Unfortunately, there are times when something falls through on completion day and the dominoes don’t topple as they should.
Your conveyancer might delay transferring the funds to the seller.
Either because they haven’t received the money from your mortgage lender, or because you still owe them money for the surveys and the other work they’ve done for you.
Avoid this by: leaving enough time between the exchange of contracts and completion to contact your lender, paying your solicitor as soon as you can, and transferring your deposit in advance of the day of completion.
You miss the contracted time for completion
There will be a time for completion in your contract, usually between 12pm and 2pm. If you miss it, you’d be in breach of contract (don’t worry though, as long as you’ve done everything you need to do your conveyancer will deal with the rest and keep you updated!).
Avoid this by: making sure everything is done at least the day before completion - never leave it to the last minute!
There’s a delay somewhere else in the chain
If someone else’s mistake derails a purchase, the chain of transfers can’t continue until it’s resolved.
There’s not a lot you can do to avoid this problem. The consolation is that, if you’re fined for not transferring the funds or leaving your old home when you should have, the person above you in the chain (who held things up) will have to pay a penalty to you. The two should cancel each other out.
You turn up at noon, as agreed, to discover that the seller hasn’t moved out yet. Or you get there and discover that they’ve taken their kitchen with them when you thought it was included in the sale. What now?
Avoid this by: being crystal clear when you’re exchanging contracts, and letting your estate agent know as soon as you discover a problem. They’ll let you know exactly where you stand.
By the time you get to your completion date, your mortgage-shopping days will be behind you. But Habito’s complete home buying service is still there, letting you keep a birds-eye view of where you are, and making sure you dot the ‘i’s and cross the ‘t’s to make your completion date as smooth as possible.