What is a house sale exchange?
The exchange of contracts marks the formal legally binding agreement between a homeowner and a buyer over the sale of their home, and it commits the buyer to purchasing your property.
An exchange typically occurs once the seller and buyer have resolved a number of issues, including agreeing on the sale price, conducting legal searches and other work, received some proof from the buyer that they have the funds necessary for the purchase, and more.
The two home selling situations where the exchange of contracts can take a very long time are when you opt for either selling through an estate agent or selling without any assistance.
You might have one or more reasons for deciding to sell your home, such as coping with the fallout from a divorce or separation, trying to resolve some financial problems, needing to raise money for a move to another country, or anything else. Whatever the reason behind the sale, if you do it on your own or through an estate agent, the exchange of contracts is an important final step.
This guide outlines what to expect when selling either with an estate agent or on your own, as well as the various factors that can affect the speed with which you exchange contracts.
And you’ll also get to read about alternative ways to sell your house or flat that might accelerate the process of exchanging contracts. One such approach is selling to an honest quick home buyer like LDN Properties, as the entire process should only take a handful of weeks. A further benefit of selling to a quick buyer is that you wouldn’t have to pay any fees on the sale.
What is involved with selling a property with an estate agent or on my own?
Before explaining the various reasons that can affect the speed at which you can exchange contracts when selling with an estate agent or on your own, it can be useful for homeowners to have a general understanding about the steps involved with selling via either method.
Selling though an estate agent means that you will not need to put much work into finding a buyer. That’s because the estate agent will be responsible for making a listing that describes your house or flat and includes photographs of it, then advertising this in their office, online and in local newspapers to get buyers interested in the property. Estate agents also schedule viewings for potential buyers, hear offers, and ideally get one to exchange of contracts.
When you sell with an estate agent, you will have to pay them commission if they succeed in selling your home, and this is usually charged within a range from 1.15 percent to 1.40 percent of your property’s final sale price. The fee will be taken out of the final sale proceeds right away, adding to your costs, so if you want to cut expenses then you should assess other options.
There are some estate agents that might charge less than the above range for commission, or at least be open to negotiating a reduced rate, which can help with lowering your total costs. But other estate agents might charge far above 1.40 percent, further increasing your expenses.
By contrast, selling on your own means that you will do all of the tasks that the estate agent would handle. This can be a very lengthy and stressful process, although it does have the benefit of meaning you would not need to pay an estate agent any fees once you sell.
Remember also that both of these selling methods share a potential problem, in that a buyer can make a genuine offer on your property but then change their mind and cancel it. This would cause the sale to collapse, requiring you to start over with seeking another buyer, and therefore extending your selling schedule much further, as Fraser Bond explains. And if contracts are not yet exchanged, there’s nothing that you can do to get any penalties from the person that withdrew the offer.
How long does the exchange process take?
The exchange process can be fairly lengthy, taking on average at least eight weeks and sometimes up to 12 weeks for everything to be agreed on and signed. When you are ready to sign, or exchange, contracts you can expect it to typically occur in the middle of the day on any weekday – although it could still happen on weekends.
Of course, the precise speed of the exchange process will be dependent on several factors that can either make it faster or longer. There are no laws or regulations that specify that the exchange must happen on a certain date or within a set time.
What factors can speed up or slow down an exchange?
There are several issues that could affect the speed of your sale exchange, ranging from how many buyers are involved in the sale chain through to problems with mortgages.
Size of the buying chain
Property chains occur when the purchase of one house is conditional on the sale of another, creating a chain of buyers and sellers. Any problems with any of the sales in the chain will therefore create the potential for delays in selling your home. This can be avoided when you are simply buying a brand-new house because all you need to do is sell your home and then buy the newly constructed property without a chain.
Problems with the property searches
As part of the home sale process, solicitors will conduct searches with local regulatory authorities and others to determine whether there are any legal issues or other previously undisclosed problems with your house or flat. If any are discovered it can slow down the exchange process. Some buyers take out indemnity insurance to protect them against legal claims for such problems once they moved in.
Problems in the mortgage process
You might have to wait longer to exchange contracts if the buyer is yet to receive a formal mortgage offer to pay for the purchase of your property. In addition, a mortgage lender might value your home at a lower price than you and the buyer previously settled on. If that happens it can lead to further negotiations over the sale which will inevitably delay the date that you and the buyer can exchange contracts.
Are there any alternatives for selling my home?
Yes, you could try selling your home at auction or to a property buying company. Both of these methods have their own advantages and disadvantages, so you should take time to read about these in addition to the steps involved with selling via an estate agent or on your own. Consider your main goals – such as your ideal sale price, how fast you want to sell and whether you are open to paying fees – in deciding which selling strategy to use for your home.
Selling through a property auction
Auctions allow you to get a firm date for when people will bid on buying your house, which can be great if you need certainty on when you can sell. However, you will typically have to set a lower opening bid price than you might think your home is worth, because the auctioneer will use that lower value to try and encourage bids on the property. There’s no guarantee you will make more than this price. And you’ll also have to pay the auctioneer fees.
An auctioneer charges fees for the effort that they put in to selling a property. This starts with putting together a listing for your home and then advertising it, in order to get potential buyers interested in the property before the auction takes place. They will also host the auction and, if your flat or house sells, they will oversee the final stages needed to complete the sale.
You can expect an auctioneer to charge their commission at about 2.5 percent of whatever final price your property manages to reach at the auction. This fee will be subtracted from the auction proceeds immediately, which will add to your expenses. If you want to sell your home without paying any fees then you may want to consider a no-fee quick buyer or selling on your own.
If you would like to reduce your costs when selling this way, you could ask individual auctioneers whether they might be open to reducing how much commission they will charge you if your home sells, or making the buyer pay a share of your expenses. But auctioneers are under no obligation to agree to these steps, and some might charge commission at a rate far above 2.5 percent, which will cost you even more if you decide to sell using their services.
Selling this way requires that you choose a reserve price, and this is the lowest price at which you agree your home can sell. You must calculate a reserve price that is estimated to generate some profit for you from the sale, even after paying the auctioneer their fees. Otherwise, you risk selling at a loss or only just breaking even by selling at a price close to what you originally paid for the property, and both of these outcomes you should try to avoid.
Note also that auctioning a home is far from the swiftest way to find a buyer, as there is a fair amount of waiting involved, including many weeks or more between the day that you decide to sell using this option and the day on which the auction takes place. And if your home sells, the buyer has about a month to complete their tasks needed to finalise the purchase.
There are some auctioneers that could be open to setting a shorter deadline than a month for the buyer to finish all of these actions, so it’s always worth asking if this might be possible. Just beware that other auctioneers might provide buyers with even more time than a month for handling these various steps, and that could delay the sale of your property even further.
Selling to an honest quick home buyer
You could also search for a reputable property buying company. These businesses work by making fast and typically very competitive cash offers to buy flats and houses. They offer several benefits to homeowners including the chance for a quick sale at a good price, and not having to pay any fees or wait a very long for the exchange of contracts.
LDN Properties and similar businesses are known as quick buyers because they can often complete the purchase of a property within a few short weeks, and that includes the time needed to exchange contracts and pay an owner the sale proceeds. They can move so fast as they already have the money in place to buy your home, so there is no waiting to first get approved for a mortgage to fund the purchase, which can take many weeks or months.
These companies are also experts at making competitive and speedy offers to buy almost any type of property, regardless of its age, condition, location, shape, size or type. That makes them a great choice for selling your home if it has any kind of structural damage, legal dispute or other significant problem that other buyers might consider to be a dealbreaker.
You’ll still get a speedy and competitive offer even when selling the home “as is” without first fixing the flaw. That can be a great outcome for those owners who have a significant problem at their house or flat that is deterring other buyers, but who lack the time, money or effort to first pursue corrective action for that negative issue before attempting to find a buyer for the home.
For example, LDN Properties launched in 2003 and since then it has made a long list of varied purchases throughout the UK that includes, but is not limited to, homes that have an improvement notice, flats with asbestos, houses that have a low Energy Performance Certificate rating, derelict properties, homes with a septic tank, ground floor flats, houses of multiple occupancy, vandalised properties, homes that have old or faulty wiring, flats that have dry rot, houses with Japanese knotweed in the garden, smoker’s properties, and many other varied situations.
And, as noted briefly above, you will never have to pay any commission on the sale of your property when you use an honest quick buyer. This helps to reduce your costs and it compares favourably to selling through an auctioneer or an estate agent, because those two options will charge you commission on the sale that would be subtracted from the final sale proceeds.
It’s also an incredibly simple, streamlined and no-stress way to sell your home, starting when you contact the company. Within one hour of talking you should receive an initial no-obligation offer on the house or flat, and you would have at least a week to consider whether to accept it.
Should you agree to the initial offer, the quick buyer will then have a representative visit your home to assess it before they make a final offer. They need to make this visit in order to assess your property’s condition ahead of making a final offer. But this is the only viewing you would need to accept, compared to possibly dozens or more when selling through other strategies.
If you then accept the final offer, the company will then move quickly to work with your solicitor or other legal representative to complete the remaining tasks needed to finalise the sale. The entire timeline from the beginning to the exchange will only be a handful of weeks, which makes selling a home this way the ideal choice for those owners trying to sell as fast as they can.
Be sure to research quick buying companies to find trustworthy buyers – one way to do this is to check with the National Association of Property Buyers. It’s a trade association that sets standards for the quick property buying industry, and if a company is a member you can rest assured they follow the right procedures when buying homes.
You should also ask individual quick buyers if they can prove that they are registered with The Property Ombudsman (TPO). This is an independent organisation that writes policies to guard owners against fraud in the quick buying industry, and all TPO members must commit to following these rules. This should give you peace of mind when selling to a quick buyer.
It is fast, free and simple to check the membership status of a quick buyer – just visit TPO’s website and click on the “Find a Member” tab on the left side of the welcome page and, when prompted, type in the name of a specific company. If they are a true TPO member, like LDN Properties, you will get to read their registration details. If you get zero results then the company does not belong to TPO and you should not sell your home to them as it might be a scam.
Exchanging houses: a few of our most-asked questions
Some of the most frequently asked questions that we receive from homeowners about the time that it takes for a house sale to exchange include:
If you are selling through a chain then unfortunately there aren’t really any tricks you can use to speed up the exchange process. You’ll have to be patient and anticipate waiting anywhere from 8 to about 12 weeks for the exchange to happen.
Yes. Although the 8 to 12-week time-frame is a general guideline, some exchanges can take much longer if issues arise such as problems with the buyer securing a mortgage or a hold-up in the property buying and selling chain.
No. You can expect your home sale to go much faster if you list your house at auction, or sell to a quick property buying company. But note that auctioneers will charge you fees, whereas property buying companies typically will not.
When you’re trying to sell almost any type of leasehold or freehold property, you could choose from selling on your own, selling with an estate agent, selling to a quick home buyer like LDN Properties or selling through a property auctioneer. All four of these options have their own benefits and drawbacks in terms of how long they take, whether they charge fees, and more.
If you decide to sell your home either on your own or to a zero-commission quick buyer such as LDN Properties then you will not have to pay any fees on the sale. But if you choose to sell through an auctioneer or an estate agent and they manage to sell your home, you will have to pay them commission and this fee will be taken out of the sale proceeds right away.
Selling your home to a quick buyer like LDN Properties will typically be the fastest choice because it should only take a few short weeks from start to finish, and this includes the vital final steps of exchanging contracts and paying you the full sale proceeds. By contrast, selling through an auction, with an estate agent or on your own can all take at least a few months.
You can check with the National Association of Property Buyers for a list of honest quick buyers such as LDN Properties. And only sell your home to companies that can prove they belong to The Property Ombudsman, which is an independent entity that writes rules to protect owners against scams in the quick buying industry, so that you should give you extra peace of mind.
For a faster way to sell your house or flat, call the expert team at LDN Properties
Our focus is on giving homeowners speedy and generous cash offers to buy their properties without ever charging them any fees. It’s a simple and no-stress way to sell your home on an accelerated timeline.
