If you’re going through the process of getting a mortgage or buying a house, you know there are lots of specialist terms used that might be confusing. For example, the difference between completion and exchange.
Completion is the final step you’ll go through when buying your home, and while it can be an extremely exciting day, knowing what to expect can help things go as smoothly as they can. So, let’s explore what completion date means, who decides when completion date happens and whether completion date is the same as moving date?
What does completion date mean?
Put simply, completion date is the day the property you’re buying officially becomes yours, as this is the day the funds are transferred from your account to the seller.
You can think of it as ‘completing’ on the deal. From this date, you’ll be given the keys, and can officially move in! If you’re the one selling the property, this will be the date you can expect to receive the funds from the person buying your house or flat.
What happens on completion day?
On completion date, your conveyancer will initiate the transfer of your deposit money, and the money from your mortgage lender directly to the seller’s conveyancer. Both conveyancers will discuss with each other to confirm the payment has been sent, and then received. You’ll also need to be sure that any final bills or payments have been paid before the conveyancer will allow completion to happen. This can include fees like conveyancing costs, as well as any fees due to the lender (e.g. telegraphic transfer costs)
You should receive a completion statement from your solicitor that shows a breakdown of the funds you’re providing and where they will go. Once this is all confirmed, you’ll be able to pick up the keys and the seller must leave the property and remove any belongings still inside.
There are two must-be-abided-by rules about completion date:
- Complete date must happen on a weekday, so that the banks are open to transfer the funds (this also means your completion date will never be on a bank holiday!)
- The date must be agreed by both you and the seller.
You’ll typically find that completion date happens about 1-4 weeks after you exchange contracts, as from this point you have agreed legally to buy the property. Ideally, you probably want to leave at least a week between exchange and completion, as this allows you to finalise the loan you’re receiving from your mortgage lender, as well as transferring funds to your conveyance.
Is completion date the same as moving date?
As this is the day you get the keys to your new property, you could absolutely look at completion day as moving day! Of course, you can choose to officially ‘move into’ the property whenever you like, however if you are in a chain you will probably want to keep the process moving as quickly as you can, as there could be people looking to move into the property you’re moving out of.
If the property you’re buying or selling is part of a chain, it’s important to understand that everyone’s house purchase relies on everyone else’s. Providing everything goes smoothly and there are no delays (e.g. a mortgage lender is delayed when releasing the funds, or someone’s bank takes a few hours to transfer the money), the funds will be transferred one after the other (not all at the same time) so you may be first in the line, or you may be last!
Who decides completion date?
The buyer and seller must agree together when the completion date will be. This will usually be during or before contracts are exchanged, as it’s not possible to exchange contracts without having an agreed completion date within the contract.
You may even choose to exchange and complete on the same day (this is becoming more common) however, it is usually advised against due to the risks involved. If a problem occurs on the day, your conveyancer will have to return funds to your mortgage provider and then request these funds again when everything is resolved, which can not only take a while, but can cost you; if you’ve paid a deposit to your movers, or have to pay a fine due to not being able to leave your current property when you said you would if part of a chain.
What happens if I am unable to transfer funds on completion date?
If you fail to transfer funds on the date of completion, you will likely face a fine, although if you were unable to pay because your buyers didn’t transfer you the money they were supposed to, they will pay a penalty to you.
How Key Solutions can help
By the time you get to your completion date, your days of shopping for mortgages will be behind you! But luckily, Key Solutions are here with you forever, with most of our clients returning to us when they’re ready to move house or remortgage.
Keep us in mind when the time comes, feel free to reach out to our team if there’s anything you need, or read through the rest of our resources for more useful tips!
