An “exchange of Contracts” means that your representative (usually your solicitor) has handed the Contract of Sale signed by you to the vendor’s representative and received an identical Contract signed by the vendor.
The Contracts are then dated.
Once this has occurred you are bound to proceed with the purchase of the property in the terms as set out in the Contract.
Put simply, the exchange of contracts means that you’ve officially agreed to buy a property.
Before the contracts are signed, the terms of the contract are still negotiable – by both the buyer and the vendor.
At exchange of contract there will be at least two copies of the contract of sale – one for the buyer and one for the vendor. This is where the term “exchange” of contracts comes in as both parties need to sign both contracts and “exchange” them.
Once the contracts are signed it’s important to clarify the settlement date which is when the actual change of ownership takes place.
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