Residential property: what does ‘completion’ actually mean and what will happen on the day?

Congratulations! You have exchanged contracts; this means that a date for completion has been agreed between you and the seller (if you are purchasing) or between you and the buyer (if you are selling). It is best to seek professional advice from a property solicitor in all property dealings whether you are buying or selling.

The completion date has been inserted into the Contract and becomes your official moving day. Depending on whether you are a seller or a buyer, you will be either moving in or moving out of the property on this date.

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The Contract has been exchanged and the completion date is set; so what happens next?

In the run-up to completion, your property solicitors will prepare your file for completion, which includes setting up the money transfers.

For example, if you are buying, we will request your mortgage money from the lender, and arrange for these funds to come in the day before the completion date. We ask for the funds to arrive the day before so as not to cause any delays on the moving day. We will also collect any balance of money that is required from you in good time for the completion date.

We prepare our bank account so that once the mortgage funds have arrived from your lender we can transfer the purchase monies to the seller’s solicitor on the morning of completion.

If you are selling, we will telephone you after the exchange of contracts has taken place to check that we hold the correct bank details for you.

We will request the estate agent’s commission account, and an updated redemption statement from your mortgage lender (if there is a mortgage). We will then prepare our bank account to make the payments to you, the estate agent and the mortgage lender.

As soon as we have received the purchase money from the buyer’s solicitor, (who will have similarly set up a money transfer on their system, as explained above) we will make the payments from our bank account.

You do not need to do anything during this time. Your responsibility as a seller or buyer will be to take care of the removals, pack up your belongings and take final meter readings. 

Learn more: When buying or selling a property, you should carefully consider whether you need a residential conveyancing solicitor.

What happens on the completion date?

On the morning of completion, your property solicitors will deal with the money coming in and going out, as explained above.

For example, with Goughs Solicitors this will involve us instructing our bank to finalise the pre-prepared payments that have been set up on our system.

If you are selling, we will let you know when the money has arrived from the buyer’s solicitor and we will ask you to confirm that you have moved out of your property and dropped the keys into the estate agents office. We will then contact the estate agent and confirm to them that they can hand over the keys to the buyer.

If you are buying, we will instruct our bank to send the purchase money to the seller’s solicitor and wait for them to contact us to confirm they have received the money and that they have contacted the estate agents to release the keys. The estate agents will then call you to let you know you can pick up the keys to your new home.

What time can we expect to move out (seller) or move into (buyer) the property?

The Contract between the seller and the buyer will include a contractual completion time i.e. the latest time by which the buyer or seller must have completed the sale or purchase of the property. Usually, the contractual completion time is agreed at 1.00pm but in the absence of any specific contractual completion time, the default time will be 2.00pm.

The completion time can sometimes be set as earlier, such as 12.30pm, if the chain is particularly long and the buyer at the bottom of the chain needs to start the ball rolling by paying over their money earlier in the day to allow the funds to be paid all the way up the chain.

For example, as a buyer,  if the Contract that has been exchanged between you and the seller, specified a contractual completion time of 1.00pm, your solicitor must arrange to pay the full purchase price for the property to the seller’s solicitor, so that the money has arrived in the seller’s solicitor’s account by no later than 1.00pm on the completion date.

This is why, when we act for a buyer, we request mortgage funds from the lender in advance and set up the payments on our system in advance so that we can act swiftly on the morning of completion in sending the purchase funds to the seller’s solicitor.

This practice quite often allows for completion to take place much earlier than the contractual completion time of 1.00pm i.e. if we send funds at 9.30am, they should have safely arrived with the seller’s solicitor within 30 minutes, and the seller’s solicitor, in turn, will have contacted the estate agent as soon as they receive the purchase money, which can and often does mean that the completion can be wrapped up by 10.30am!

Learn more about how our property solicitors can help.

After we move in or move out of the property, what happens next?

Once you have completed, we will pay the other disbursements on completion. If you are selling, this will be the estate agents’ commission, mortgage redemption monies and any land registry or council document fees for example.

If you are buying, the disbursements will be the Stamp Duty Land Tax, search fees and the Land Registry’s registration fees.

We will also settle our legal fees on completion out of the net sale proceeds, or if we are acting for you as the buyer, we will ask that you pay our legal fees before completion. 

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