Buying a house is an exciting journey filled with anticipation and dreams of a new home.
But it’s also a process that involves a lot of steps and terminology that can be confusing, especially for first-time buyers. One term you’ll come across is the ‘completion date’.
But what does completion date mean when buying a house? Let’s find out.
Understanding the home buying process
Before we dive into the specifics of the completion date, it’s important to understand the broader home buying process in the UK.
Buying a house is not a single event, but a series of steps that include viewing properties, making an offer, securing a mortgage, exchanging contracts, and finally, completion.
Each of these stages has its own procedures and timelines, and understanding them can help you navigate the process more smoothly.
What is a completion date?
So, what exactly is the completion date?
In the simplest terms, the completion date is the day when the property you’re buying officially becomes yours. It’s the day when the ownership of the property is transferred from the seller to you, the buyer.
On this day, the funds from your mortgage lender and your deposit or equity are transferred to the seller’s solicitor, and once the payment is confirmed, you can pick up the keys to your new home.
It’s the day when all the paperwork, legal checks, and financial transactions culminate in you becoming a homeowner.
Property chains
If you’re buying a property as part of a chain (where your seller is also buying a property, and their seller is buying another, and so on), the completion process can be a bit more complex.
In a property chain, the completion of each transaction depends on the one before it. This means that if there’s a delay in one part of the chain, it will most likely cause delays for everyone else.
For example, if the buyer at the start of the chain is delayed in transferring funds, it will delay the completion for everyone else in the chain.
The completion date in a chain is agreed upon by all parties involved, and it’s typically around 7-14 days after the exchange of contracts.
However, the exact timing will vary depending on the length of the chain and the specific circumstances of each buyer and seller.
Choosing, and agreeing, on a mutually acceptable date can be stressful and frustrating. Everyone has their own priorities and issues.
Completion will take place on a weekday, excluding bank holidays, to ensure that the necessary bank transfers can take place. And, of course, we know that solicitors don’t work weekends or Friday afternoons anyway!
The exact date is mutually agreed upon by you and the seller, taking into consideration factors such as the seller’s ability to vacate the property, removal firms and the readiness of the funds for transfer.
CONTACT A MORTGAGE BROKER
If you are ready to take the next step then we can put you in touch with a fully qualified independent mortgage broker.
What happens on completion day?
Completion/Moving day is a busy time filled with a flurry of activities.
Here are some of the main ones:
Packing up
One of the first steps in preparing for moving day is choosing a reliable removals company. A good one will make the process of moving so much easier.
Get everything safely packed up and labelled. Much of this can be done in the days prior to moving.
insurance
The day your property purchase is due to complete is the day you need your contents insurance policy to start.
Your buildings insurance needs to be in place from exchange of contracts, not completion.
Transfer of Funds
Your conveyancer (or solicitor) transfers the money from your mortgage lender, plus your deposit, to the seller’s solicitor.
This is usually done via a bank transfer using the CHAPS system, which allows for same-day transfers.
Confirmation of Payment
Once the seller’s solicitor confirms that they have received the purchase price, the completion has legally taken place.
This means that the property is now officially yours.
Handover of Keys
After the confirmation of payment, the keys to the property are released. Usually, the keys are held by the estate agent, and you can pick them up from their office.
Moving In
With the keys in your hand, you can now move into your new home.
The seller of your new house would normally have moved out by 12pm on the same day but occasionally they may have already vacated.
check…
It’s tempting just to full steam ahead and get everything unpacked and moved to the right rooms.
But it is a good idea to check any utility meters and take readings, check you have all relevant property keys and check that the items/fixtures that were being left, have actually been left.
takeaway curry
After a long day of moving and unboxing, cooking will be the last thing on your mind, and rightly so. So celebrate your successful move with a well-deserved and delicious curry from your local takeaway.
Put your feet up, and raise a poppadom to your new home. You’ve earned it!
Potential issues and how to deal with them
While completion day is typically a smooth process, it’s not without its potential hiccups.
Here are some common challenges that might arise:
Banking Delays
The transfer of large sums of money can sometimes take longer than anticipated due to banking security procedures. If each bank in the chain takes extra time to process the payments, it could lead to unexpected delays. It might be worth advising your bank of your intentions.
Penalties Due to Unforeseen Delays
Sometimes, through no fault of your own, you might find yourself unable to move into your new home. This could lead to contract penalties being imposed. However, the silver lining is that the penalty paid by the seller of your new home could be passed onto you, which you can then use to offset your own penalty. This way, the chain can provide some level of protection.
Logistical Challenges with Removals
Amidst the flurry of admin and financial tasks, the physical act of moving your belongings from one house to another can sometimes be under-planned. To help avoid any issues, ensure you hire a removal company that is experienced, reliable, and capable of completing the move within the required time-frame.
The Domino Effect of the Housing Chain
While less common, issues can arise from the domino effect of the housing chain. If one person in the chain fails to complete, it will most likely have a ripple effect, impacting everyone in the chain.
Last-Minute Changes
In rare instances, a buyer or seller might have a change of circumstances and decide not to proceed with the move. While these situations are unfortunate and can be costly, they are part of the unpredictable nature of the home buying process.
Special considerations for new builds
If you’re buying a new build home, or one off plan, the whole buying process will be a bit different, and longer.
Because the house is still being built, a fixed completion date isn’t usually possible. But the housebuilder will still need you to exchange contracts.
The completion date for new builds is dependent on the construction schedule, which can be subject to delays.
In such cases, the period between the exchange of contracts and completion will be longer than usual, sometimes extending to many months. Once the property is built and ready, a completion date can be agreed upon.
The role of a mortgage broker
In many respects the job of a mortgage broker is done once you receive your mortgage offer.
You asked them to find you a great mortgage deal and then help to set it up, and that’s what they did. Job done!
But no. Your broker is not finished. There’s more work for them to do. More advice. More answering questions. More being a good, wonderful, helpful, value for money mortgage broker. 😆
Even when exchanging contracts is looming issues can arise, unexpectedly, of course.
Your seller asks you for more money – “Can we increase the mortgage amount to cover it?”
The property chain is still a mess – “Can I get a bridging loan so we can move now?”
Your new build mortgage offer is running out – “Can we get an extension?”
get me one of those fabulous mortgage brokers now!
