Exchange Agreement and Joint Closing Instructions

The moment when a buyer and seller transfer papers to demonstrate that the sale of real estate constitutes a legally binding transaction is known as the “exchange of contracts.” Once a buyer and a seller have exchanged contracts, the sale is confirmed at the agreed-upon asking price, and neither side is able to back out of the deal without risking extremely severe financial consequences. The trading of contracts is a very important step in the process since before this point, neither the buyer nor the seller are legally obligated to complete the transaction of selling the property. The official acknowledgement of the agreements does not take place until after every aspect of the real estate transaction has been resolved.

Before any of the following should take place:

Both the purchaser and the vendor have reached an agreement on the price of the acquisition.
·Mortgage surveys and values have been finalized.
·The buyer already has a binding offer for a mortgage in place.
·The buyer has the necessary money available for the deposit.
·The purchaser’s legal representative has conducted all of the necessary searches.
·Both the purchaser and the vendorhave reached an agreement over which furnishings and appliances will be included in the purchase.
·The purchaser has arranged for a buildings insurance coverage to start on the day that the exchange of contracts takes place.
·The purchaser and vendor have come to an agreement over the closing date of the sale.
·The contracts have been reviewed, comprehended, and signed by both the buyer and the seller.

Even though the day that the buyer and seller exchange contracts is a significant one for both of them, the procedure of doing so is actually extremely uncomplicated and requires no participation from either of them. The timing for the exchange of contracts will be decided upon by the attorneys representing the buyer and the seller. In order to verify that both versions of the contract are identical, the two attorneys will each read aloud the section that pertains to their respective client over a recorded phone call with the third attorney. When everything has been settled, each sets of solicitors will send the other’s version of the contract through post.

The conclusion of the round table discussion is a real event. At this point, the parties meet one another in person to conduct the transaction of transferring money and exchanging papers. The closing of the escrow account is merely a legal illusion. It is a process in which the parties may never encounter one another, and the documents may be persued at different times and in different places. The conclusion of the round table discussion creates a real time and location toward which all participants will strive in order to reach a conclusion. When there is a hard deadline hanging over people’s heads, it serves as motivation for them to get their work done. Both the buyer and the seller must be present at the closing in order to resolve any outstanding issues or issues that have arisen at the very last minute.