What does it mean contracts were exchanged ?

Answer 1

Ermmm

Both sides of a deal have signed their copies of the contract and exchanged them to complete the deal.

Answer 2

It means that the deal is now legally binding for both parties (buyer and seller). Contracts are normally exchanged by telephone using a law society formula which legally binds each solicitor into posting the contracts to each other. Its when the telephone call is made that it becomes legally binding - not when the contracts are received in the post (as this is merely a requirement of exercising the law society formula thingy).

Normally at exchange of contracts, the buyer puts down a 10% deposit and a completion date is agreed. In the case of a new build property, its normal practice for no completion date to be agreed - just something along the lines of "as soon as possible with 10 day notice period".

If the buyer defaulted (or dies) after exchanging contracts, then the seller could sue for the entire value of the transaction (i.e. the house price). However, such a measure would be costly and time consuming. In reality, the seller would keep the 10% deposit and find another buyer.

Answer 3

If you are purchasing a property then it means you have entered into a contract and are legally bound to buy the property from date of exchange of contracts. On the completion date stated in the contract you have to pay the rest of the purchase price and you can obtain the keys and the property becomes yours. You should also insure the property from the date of exchange as if property burns down it will be your insurance that pays up. I am surprised your solicitor did not explain this fully. If you pull out of buying the property now, you will lose your deposit and may be sued for monies lost by seller. On the other hand, the property cannot now be offered to somebody else to buy, so it is pretty much yours, other than tying up a few loose ends. After exchange of contracts the solicitor has to apply for your mortgage money and do some searches before completion date. You won't be allowed to move in until completion date but you may be able to negotiate going in to decorate but best not do too much in case anything does go wrong. Good luck!

Answer 4

This is the point where both vendor and purchaser legally commit themselves to the sale/purchase with a pre agreed completion date (moving date) established as part of the contract, and normally speaking a deposit is paid by the purchaser. At this point if either party where to withdraw from the deal prior to completion there is a severe financial penalty, and so after exchange you are 99.9% certain that the deal is done.On completion the final outstanding balance of funds are transferred from the purchasers bank to the vendors, completing the transaction.

Answer 5

It means the documents that you probably signed or signed and took to your solicitors office are exchanged with the vendors signed documents between yours and their solicitors.

Copies are kept by both and this the sealing of the deal, what was a potentially a deal is now a confirmed deal.

Answer 6

By rule of law, a contract isn't a contract unless both parties have a copy and both sign.

Answer 7

It means that the deal is now legally binding.

Answer 8

Its a done deal

Answer 9

it means the deal is done

Answer 10

it means its all done