Most people don’t buy or sell properties every day and so when they do some terminology used commonly in the property market that can be quite confusing.
Two of those terms may be the ‘exchange date‘ and the ‘completion date‘ for your transaction. People sometimes confuse them being as being the same thing but they usually aren’t.
The exchange date is, generally speaking, the date on which the purchaser signs the contract and pays the 10% (ors sometimes 5% if negotiated) deposit and thereby enters into a legal commitment to purchase the property at some date in the future.
That future date is usually called the completion date or the settlement date (meaning the same thing). This is, quite simply, the date the vendor gets paid rest of the purchase price and the date when the purchaser has legal title transferred to them.
The completion period (i.e. the date between exchange and settlement) is usually set at 42 days. This is negotiable of course, and can be shorter (reasonably commonly as short as 28 days) or longer (90 days or longer). But this is the time period the market has picked has enabling both parties to do all they need to do to ready for settlement.
(Those things include, on the purchaser side, signing loan documents, doing searches on Council, Water (and potentially Strata) rates and on the sale side, arranging for a discharge of the mortgage (if applicable) and sorting alternate accomodation.
To confuse things a little bit, properties are something sold with a cooling-off period (usually 5 or 10 business day but sometimes longer). Remember, the exchange date is the date contracts are signed, not the date the contract becomes unconditional. Some buyers are caught out by this!
If you have any questions about this article, please contact the office on 1800 870 407 and one of our solicitors/conveyancers will be able to assist.