Buying a house is a big move, and a lot of the stress can come right at the end of the process. Here’s how to ensure completion day goes smoothly for you.
For home buyers, especially ones doing it for the first time, the process can seem like a roller coaster. With so many hoops to jump through and so many people to keep happy, finally closing the deal can seem like a long way off.
Now imagine getting to this point, the point of completion, and everything falls through at the last minute. It’s understandable that you’d feel a bit miffed. With that in mind, we’ve prepared a guide to this critical point in the process so you can feel as prepared as humanly possible.
What is completion day?
Completion day (the clue’s in the name) is the point that all the process of buying a house leads up to. On this day, the agreed upon sums of money are transferred, keys exchanged, and you could begin moving into your new home.
The exact date of completion for your property purchase will be agreed some time beforehand between the vendor and the buyer. Remember that funds need to be moved in and out of various bank accounts, so it’s generally agreed to be a working weekday. That means that both the banks are open, and solicitors should be working, in order to finalise the last-minute details.
Traditionally, completion is arranged to happen anywhere from seven to 28 days after exchanging contracts. However, exchanging and completing on the same day is not unheard of. It’s faster, and it eliminates the need to pay a deposit on the exchange of those contracts.
On the other hand, it involves combining two of the most stressful days in the process into one, and not all mortgage lenders are happy with the two happening on the same day. So, while your mortgage lender might be fine with it, the other side’s might not.
What happens on completion day?
In short: An awful lot happens on completion day. Both parties, as well as their legal representation, will have roles to play in closing the deal, and these will each depend on who is buying and who is selling.
For buyers, completion day looks like this:
• First, funds will be transferred from your solicitor to the seller’s solicitor.
• Once that’s done, the seller’s solicitor will call the estate agents to give the green light for releasing the keys to the house. The estate agents will call your solicitor, who will, in turn, inform you.
• You’ll then be registered as the owner of your new property with the Land Registry. Completing this process can take some time, sometimes weeks, or even months if it’s a newly built property. Thankfully, that shouldn’t delay you moving in, and you’ll receive all the official documents showing that you own the place once it’s finished.
• Your solicitors will also pay the Stamp Duty Land Tax to HMRC.
The good news is that most of this is handled for you by your legal people. Once you’re in, you just need to make sure that the Council Tax on the property and all the bills are transferred into your name. It’s also worth making double sure to remember to let the utilities companies servicing your old property know that you no longer live there.
Completion day for sellers looks a little bit different:
• You’ll need to make sure the property is fully vacated by the agreed time, which can be any time but the traditional example is 13:00 at the latest.
• You’ll get a call from your solicitor to confirm you’re moved out, at which point they’ll contact the estate agents to release the keys to the buyer.
• Your solicitor will then handle the discharge of your mortgage and settle any other outstanding fees, such as the estate agent’s fees, before transferring the remaining sum to you and starting the process of changing the owner’s name with the Land Registry.
What can go wrong on completion day?
When completion day rolls around, in most cases it should go smoothly. However, simple human error can sometimes throw a spanner in the works and cause delays.
Many of these problems come from houses being bought and sold in a chain. Someone has to sell their home in order to move into a new one, the owners of which are doing the same thing, and so on and so forth. If just one person in the chain fails to complete, it could have knock-on consequences for everyone.
If you’re the one who’s forced to delay things, you could be subject to a fine, which you’ll obviously be keen to avoid. But what if your delay is caused by someone ahead of you in the chain?
If you’re unable to move into your new home (through no fault of your own), then you can’t move out of your existing one, which will make you subject to a fine.
In this situation, the fine paid by the current owner of your new home could be passed onto you, which you can use to pay your own fine to the prospective new owners of your house, so the chain offers you some level of protection on that score.
Common completion day problems (and how to avoid them) could include:
Delays at the bank. With such large amounts of money changing hands, banks could take some time to process the payments. If the first bank in the chain receives funds early in the day (say, 9:30am), but doesn’t action the payment for an hour, and the same thing happens at every bank in the chain, funds might not reach your point in the chain until later than expected.
This is difficult to avoid if it happens, but you could get peace of mind by consulting with your solicitor and with the bank directly about the timing of the payments you’re responsible for, and keeping everyone concerned in the loop.
Removals problems. With so many contract and banking shenanigans going on in the background, the logistics of actually getting your belongings from A to B can seem like an afterthought. But if your removals company drops the ball, you might be physically unable to move.
Avoid this by taking the time to research and compare different removals companies to be sure you’re trusting your worldly goods to the right people.
Sellers pulling a fast one. Occasionally, some sellers might pack up and move, taking with them some of the fixtures and fittings which the buyer assumed would be included in the price of the house. In 99% of cases this is just a simple misunderstanding, but it can potentially cause an impasse where buyers refuse to release funds to the seller’s solicitors.
This problem could be avoided by being crystal clear from the very beginning about what is and is not included in the price of a house. Assume nothing, especially the goodwill of the sellers (and the solicitors acting on their behalf).
More information on home buying
Completion day is just one of the many facets of buying a new home, something which many people say could have been the most stressful process of their lives thus far. From start to finish, the whole process could include:
• Assessing costs
• Preparing and applying for your mortgage
• Negotiating and offer
• Purchase and completion
• Moving in
Even after that, the process of adding value to your home and protecting the huge investment you’ve made can be a serious challenge.
Thankfully, we’ve put together a bumper home buyer’s guide right here on the Beagle Street site. It’s perfect for new buyers, or people doing it the second or third time and want a smoother process this time around.
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