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Exchange and completion

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Once you have reached this stage you are nearly home and dry, but remember that until you exchange contracts, both you and the buyer can walk away without any contractual liability.

Contracts exchanged
The contract is a legally binding document that commits all parties to the deal. There's no backing out once the exchange has taken place, unless you have a desire to be potentially liable for significant financial penalties. When both solicitors are satisfied their work on the contract is complete, they will ask their respective clients to sign the document and send a copy to the other solicitor for signature by the other party involved in the sale. This is the exchange of contracts - the moment you have all been waiting for.

Buyer's deposit received
At the point of exchange you normally receive funds from the buyer's solicitor for the deposit, assuming there is one.

Solicitor obtains a settlement figure for your mortgage
Most people selling their home will not have paid off the entire amount of their mortgage. Although some lenders now allow you to transfer the outstanding balance from the property you are selling to a new home, most people don't have that option and tend to redeem one mortgage before taking out a new one. Your solicitor will find out exactly how much you are required to pay off (including any fees, redemption penalties and other charges - click here for an example schedule of charges that lenders can hit you with)

Approves the transfer deed and arranges for you to sign it
The transfer deed is the legal document that legally transfers ownership of the property to the buyer.

Balance of funds received from buyer's solicitor
The buyer's mortgage company will send the remainder of the purchase funds to your solicitor. This is usually carried out by electronic transfer.

Deeds sent to buyer's solicitor
Once the purchase monies are received by your solicitor, the title deeds will be released and you no longer own your old home.

Solicitor takes fee from balance of your mortgage
Before you get your money, your solicitor will normally extract any fees and other costs that he has charged you.

Solicitor clears the balance of your mortgage
The funds that arrive from the buyer's solicitor are then used to clear the outstanding amount of your mortgage.

Remainder of mortgage balance sent to you
Any money that is left over (often quite a sizeable sum!) is then transferred back to you.

Transaction complete
Everything is done and dusted.

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